There is great news to report this week, as National NER for the
tracked 2 and 3 bedrooms have officially moved positive YoY. Rising this week to $1,882 and $2,181 respectively, both are now within striking distance of their pre-pandemic highs. The 2-bedrooms need to recover to a pre-pandemic high of $1,950, which should occur by the end of June if recent growth rates continue. The pre-pandemic high for 3-bedroom units was $2,243, which we forecast will be reached within the month.
Our average NER rose 1% to $1,694 this week. NER is still down 0.8% YoY, but we expect this number to become positive next week. Our pre-pandemic high NER was $1,771, and if recent growth rates continue, we forecast that that figure will be surpassed by mid or late July. With our leading indicators showing continued strong demand for multifamily housing, we feel confident in predicting continued growth in NER as we head into the summer months.
Key Takeaways – Data as of 5/16:
- Traffic and Leases: National Traffic and Lease rates have now posted rates at peak post- pandemic levels for a month straight. o This sustained interest in multifamily housing nationwide, even as NER continues to grow and inventory shrinks, bodes very well for the recovery of the multifamily housing market and even further as the industry looks to grow beyond pre-pandemic peaks. o Denver posted a 15% jump WoW in Leases/week, rising to 4.77 executed leases. Denver is now our top performer for leases nationally.
- Occupancy and Leased Percentage: Occupancy and Leased rates ticked up 10 bps each this week, to 95.3% and 96.7% respectively. These rates are continuing to push into levels higher than any seen in Radix’s data tracking history. o We are still tracking the status of the national eviction moratorium and how its repeal will affect Occupancy and Leased rates at a time when listed inventory is historically low. We will share our findings when any further data becomes available.
- Net Effective Rent: As noted above, NER posted significant gains across the board this week. National NER is up 1% WoW and 3% MoM. This gain is reflected evenly across bedroom counts. Studio floorplans, down 10% YoY, continue to lag significantly behind other floorplans in recovering ground lost during the pandemic. o This week was a big one for the San Francisco Bay Area, with posted gains of 1.8% in San Jose and 1.6% in San Francisco. With monthly gains of 3%, these two metros are trailing another West Coast tech hub, Seattle, which is up 4% MoM. However, Jacksonville, up 4.5% MoM, currently leads the pack for monthly gains.