Rent And Operating Trends – Week Of December 17th 2023
Key Takeaways – Data as of 12/17/2023
Traffic and Leases:
- Average traffic nationwide is 6.4 tours per property while 2.1 new leases are signed each week nationwide. The year-end conversion ratio is 33%.
- Year-over-year traffic is down 0.2 tours, while annual leasing has fallen by 0.1.
- Traffic and leasing were mostly flat last week.
Occupancy and ATR:
- The national occupancy rate is 93.76% and will end the year 67 basis points below last year’s occupancy level.
- Most of the year’s losses were seen from August to November.
- Last week occupancy dipped 1 basis point.
Net Effective Rent:
- Average net effective rent nationwide is $1,821, down 1.4% from a year ago.
- Net effective rents increased through the first half of the year, but the seasonal slowdown in the third and fourth quarters wiped out the modest gains seen early in 2024. The seasonality in rent growth is not surprising given new supply, and I would expect a similar trend next year. The supply wave will not dissipate until 2025 at the earliest.
Revenue Per Available Unit:
- Revenue per available unit is a new metric we released this year and has proven valuable as turbulence in operating fundamentals gripped the market. By combining rent growth and occupancy into one metric, we can see the compounding challenges brought on by the supply wave both at the national level and market level.
- Nationwide RevPAU is down 2.1% year-over-year.
- In the hardest hit markets like Austin and Jacksonville, RevPAU has fallen more than 8% from a year ago.
We thank you for your continued support of Radix and hope you enjoy the holidays. Stay tuned for more insight coming your way in 2024!
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