Rent And Operating Trends – Week Of January 21st 2024
Key Takeaways – Data as of 1/21/2024
Traffic and Leases:
- Traffic and leasing both increased last week at the national level. The average number of leases signed per property is now in line with its early 2023 level, while traffic remains slightly below where it was a year ago.
- 32 of the 45 markets tracked by Radix Research experienced an uptick in traffic last week, led by Riverside, CA, which saw traffic jump nearly a full tour per property last week alone. San Diego and Sacramento also posted strong weeks, as California metros took the top three spots in our weekly traffic growth rankings.
- Leasing activity increased the fastest in Salt Lake City, Austin, and San Antonio, three markets in desperate need of growth. Plentiful new supply has hurt these markets; however demand seems to be holding strong.
- The same cannot be said for another high supply market, Nashville. The Tennessee metro lost nearly a half lease per property last week and is averaging only two new leases signed per property each week. Given the intense supply pressure, any demand deterioration in Nashville will extend the underperformance that the market is already experiencing.
Occupancy and ATR:
- For the third straight week national occupancy gained one basis point.
- Minneapolis led all markets, picking up nine basis points last week. While annual growth remains negative, the recent increase propelled the Twin Cities metro near its occupancy level from last year.
- Mid-Atlantic markets struggled last week as Baltimore and Virginia Beach occupancy fell the fastest. Both MSAs lost more than 10 basis points. However, overall occupancy remains healthy in the mid-Atlantic. Baltimore’s overall occupancy is 94.5% and Virginia Beach occupancy is 95.2%, both outpacing the national average by a meaningful margin.
Net Effective Rent:
- Nationwide net effective rent grew four basis points, and the average NER was $1,815. Year-over-year rents are down 1.5%.
- Greenville, SC posted a strong week, as rents increased 1% over the past seven days. Baltimore, Memphis, and Nashville also posted steady gains in the past week.
- Rents fell the fastest in New York last week, as average NER slipped 60 basis points. San Diego and Chicago rents also fell last week, however the three markets with the lowest performance last week all maintain healthy annual rent growth.
- One potential sign of strength for rent growth is that the largest gains are now larger than the largest losses. For a number of months, the weakest performing markets recorded losses far greater than the gains in the top performing markets. That has reversed in recent weeks.
Revenue Per Available Unit:
- Revenue per Available unit also grew four basis points nationwide last week. The national average RevPAU is $1,700.
- Over the past three years RevPAU has increased 17.4% as apartment revenues across the nation have experienced a generation shift. Despite the challenges of the last year, long-term growth remains very healthy.
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