Radix Logo

Rent and Operating Trends Week of December 4th

Share this post :

Rent and Operating Trends Week of December 4th



Last week was a strong week for economic indicators as both the GDP and employment report exceeded analysts’ expectations. In its second estimate, GDP was revised upward to an annualized rate of 2.9% in the third quarter. The increase represents a sharp bounce back from contraction in the first two quarters of this year. Non-farm payrolls increased by 263,000 in November, well above the roughly 200,000 new jobs that most analysts were predicting. While employment gains continue to decelerate, the quarter million new jobs added last month indicates how tight the labor market remains, despite headlines being dominated by large tech layoffs. The unemployment rate remained at 3.7%, well below the long-term average and wages continued to rise, increasing 60 basis points last month alone. On an annual basis, wages are up 5.1%.

Speaking at the Brookings Institute last week, Fed Chair Jerome Powell indicated that the Fed may begin slowing the pace of interest rate hikes at its upcoming meeting in December. While rates are likely to continue to rise until inflation falls back to roughly 2%, Powell’s remarks indicate the first change since the Fed began raising rates in early 2022. The prospect of lower inflation has caused the 10-year treasury to drop roughly 50 basis points in the past month. The yield curve inversion continues to steepen with the 10-year treasury now roughly 20 basis points below the 1-month treasury. In previous cycles, an inverted yield curve has been a strong predictor of a recession.

Multifamily fundamentals continue to decline as apartment demand cools during the holiday season. Traffic fell below 7 per property per week for the first time since January, and all other key operating metrics were also negative last week. As the industry normalizes from last year’s historic growth, I expect to see continued softening in the coming months.

Key Takeaways – Data as of 12/04/2022

Traffic and Leases:

  • Traffic and leases signed both dropped last week. Nationwide, the conversion ratio is roughly 32%
  • Traffic fell in all but a few markets, with Boston and Tucson, AZ recording the only weekly traffic increases among the top 30 markets. Boston is among the lowest for traffic, leases signed and conversion ratio.
  • Both traffic and leasing remain above their levels from this time last year, however the annual growth is slowing.

Occupancy and Leased:

  • Nationwide occupancy fell another two basis points last week to 94.5%.
  • While 10 of the top 30 markets registered occupancy gains last week, the increases were modest, and were more than offset by heavy declines in Chicago, Jacksonville, Nashville, and Boston.
  • Only 5 of the top 30 markets have an average occupancy above 95%.

Net Effective Rent:

  • NER nationwide dropped 30 basis points last week and the average NER is $1,863.
  • The largest drop last week came in Salt Lake City, a market that had been outperforming its peers for most of 2022.
  • New York, San Jose, and San Diego, three of the most expensive markets in the country, also saw rents fall significantly last week.
  • Concessions increased 3.1% nationwide last week and property managers are using all resources at their disposal to combat the seasonal cooling.


Radix Research

Research is a powerful solution for benchmarking and evaluating the performance of live properties and portfolios at submarket, market, and national levels. With access to a wide range of data analytics, Radix Research offers the most comprehensive, timely, and leading data, streamlining the research process for all stakeholders.

To retrieve this data, request a demo today.

More Posts

Scroll to Top