The employment market has been garnering significant attention recently, both for positive and negative reasons. Headlines continue to focus on big tech layoffs as Microsoft and Spotify joined Google, Amazon, Meta and Twitter in announcing major staff reductions in the past few days. Many economists view the tech layoffs as a reaction to over hiring in 2020 and 2021, however, and the overall strength of the employment market remains the lone beacon of light in the macro economy. Last week initial jobless claims fell to a 4-month low. More than 200,000 new jobs have been added per month going back to the beginning of last year, and the gains have been well diversified across sectors. Because the employment sector is so strong and the financial system is not wildly overleveraged, the upcoming economic slowdown will likely be light and short.
Regular readers of our RAOT report will know that we mainly focus on traffic, leases, occupancy, and net effective rent. We have recently expanded our research data to include new metrics such as Available to Rent (ATR) and Revenue per Available Unit (RevPAU). Our coverage has also expanded to include new MSAs such as Minneapolis and we will be continuing to expand in the coming months.
Apartment fundamentals had a good week last week, with a number of key metrics turning positive, while others appear to be flattening as we approach the end of January. Net effective rents nationwide picked up for the first time in a number weeks, and traffic, leases and ATR all improved last week as well. Occupancy fell slightly but the pace of decline continues to decelerate, and we could be approaching a bottom in the coming weeks.
Key Takeaways – Data as of 01/22/2023
Traffic and Leases:
Net Effective Rent:
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