Multifamily markets in many gateway metros are posting positive performance indicators for the first time in several months, providing what could be the most encouraging news yet for the apartment sector as it recovers from the pandemic.
Yardi Matrix’s latest Multifamily National Report revealed that overall apartment rents nationwide increased monthly by $10 in April to $1,417, marking the largest month-to-month increase in dollar value since June 2015. Year over year, multifamily rents nationwide rose by 1.6%, the largest annual increase since the COVID-19 pandemic began.
Each of the top 30 markets monitored by Yardi had positive month-to-month rent growth, the first time this has happened since the pandemic’s onset. Twenty-four of the 30 posted month-to-month rent growth at more than 0.5% in April. Significantly, while not every gateway market hit that threshold, many gateways had strong monthly movement, including Miami (with rents up 1.0% month to month), Chicago (0.9%), Boston (0.8%) and San Francisco (0.8%). New York, at 0.6% rent growth, hasn’t seen the same magnitude of rebound yet, though the Big Apple’s rental market finds itself in a better position than it was in just a few short months ago, when rents were falling by more than 2% in September and November.
Annual rent growth remains starkly negative in many gateways, especially the ones on the coasts. Of Yardi’s top 30 markets, New York has the largest yearly drop, with rents down 12.6%, while Bay Area neighbors San Jose (-10.8%) and San Francisco (-7.7%) are next furthest in the red.
Still, many gateways are now showing strong recovery signs on a trailing three-month basis. Miami again leads gateway metros with 0.8% trailing three-month rent growth, with Chicago (0.5%) and Boston (0.4%) likewise showing healthy figures. Washington, D.C. (0.2%), New York (0.1%), San Francisco (0.1%) and Seattle (0.1%) are still a few months behind in their respective rebounds, although Yardi expects the pace of gains in each of those cities to gain steam moving into the summer.
Meanwhile, rents in hot rental markets continued to sizzle in April. In California’s Inland Empire, for example, annual rent growth is close to double digits at 9.4%. The tech-heavy area has been among the nation’s leading markets for year-over-year rent growth for the past few years, with the pandemic only quickening the trend. Over the past five years, rents in the Inland Empire have skyrocketed by 31%; consider that, over the same period, national rents have increased 12%.