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Rent And Operating Trends – Week Of January 7th 2024

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Rent And Operating Trends – Week Of January 7th 2024

Picture of Chris Nebenzahl

Chris Nebenzahl

The first week of 2024 was a mixed bag from an economic perspective. Major equity indices sold off to start the year, led by the tech sector. There has been some concern that the stock market became overvalued after a surprising and very strong 2023. However, late last week the December jobs numbers supported the continued strength of the economy. In December roughly 216,000 new jobs were created bringing the 2023 total to 2.65 million new jobs. Government and Health Care led the way last month adding 90,000 of the 216,000 new positions. The unemployment rate has held steady at 3.7%.

Multifamily fundamentals had a quiet week last week, as the leading indicators edged downward but rent and occupancy were mostly unchanged. Occupancy remains the focal point for the industry as we weather the winter slowdown. Based on last year’s atypical trend, where occupancy was flat through the first half of the year before falling in the summer and fall, I will be interested to see how it performs this year.

Key Takeaways – Data as of 1/7/2024

Traffic and Leases:

  • Nationwide, traffic fell 0.2 tours per property last week, yet average traffic remains slightly ahead of its level from this time last year.
  • Traffic fell in all but two markets last week. Boston and Baltimore were the only markets where traffic increased, and in both metros the gains were minimal. Chicago, Tucson and Nashville, however, had significant traffic slowdowns last week as each metro lost at least a half tour per property from the week before.
  • New leases signed also fell modestly nationwide last week and remain close to their level from last year.
  • No markets reported leasing growth last week, as flat performance was the best any metro could do. Chicago also trailed the leasing rankings.


Occupancy and ATR:

  • Occupancy measured a small 1 basis point increase last week.
  • A few southern and western markets in desperate need of occupancy growth received welcome news last week. Miami, Salt Lake City and Tampa led the weekly occupancy rankings picking up 12 basis points, 11 basis points, and 9 basis points respectively. Sunbelt markets typically outperform during the winter, and these markets would benefit greatly from continued occupancy gains.
  • ATR was flat last week, and the average property has 15 units available to rent over the next 60 days.


Net Effective Rent:

  • NER was unchanged last week at the national level.
  • Metro level performance was split as Salt Lake City led all markets. Rents were up 1% last week in the Utah capital. Phoenix, Jacksonville, and San Francisco all had strong weeks as well, providing slight optimism for some of the hardest hit rent markets.
  • San Diego had a tough week as rents slid 30 basis points. However, rents remain 1% higher than they were a year ago.
  • Austin and Atlanta also struggled last week as rents fell 20 basis points. Both markets maintain some of the weakest rent growth in the nation.


Revenue Per Available Unit:

  • Nationwide RevPAU has fallen 2.1% over the past year. While RevPAU remains down on an annual basis, it has improved modestly over the past few months. At the beginning of Q4 2023, RevPAU had fallen 2.3% annually.
  • It’s no surprise that Salt Lake City led the RevPAU rankings last week. RevPAU was up 1.1% in Salt Lake, far outpacing any other market. The next closest market was New York at 0.4% RevPAU growth.

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Picture of Chris Nebenzahl
Chris Nebenzahl
Chris Nebenzahl is the Director of Economic Research at Radix, where he oversees all macroeconomic and multifamily market analysis. Chris has 15 years of multifamily experience in data analytics, research, asset management and acquisitions. Prior to his time in the multifamily industry Chris was a portfolio manager at Bank of New York, focusing in the government and commercial fixed income sectors.
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