Rent and Operating Trends Week of October 16th

Key Takeaways – Data as of 10/16/2022

Traffic and Leases:

• Traffic and leasing activity were both flat last week compared to the prior week, as the leading indicators continue to show signs of flattening out. On an annual basis traffic and leases signed are both increasing. 
• West Coast markets including Riverside, Portland, and San Francisco registered the largest weekly growth in traffic last week.
• Tampa, Orlando, and Jacksonville saw little change in traffic and leasing last week, and thus far it does not appear that Hurricane Ian had a major impact on the apartment market.

Occupancy and Leased:

• Nationwide occupancy fell another 7 basis points last week, and now sits roughly 130 basis points below its average from this time last year. The national average leased percentage also fell last week. 
• Chicago, Dallas and Raleigh saw the largest occupancy drops last week, with each market declining by more than 10 basis points. All three have market-wide occupancy below 95% after having occupancy at or above 96% at this time last year.

Net Effective Rent:

• NER dropped 30 basis points last week nationwide, as the softening trend continues.
• Rent’s dropped in almost all markets last week, but more striking is the number of markets now registering year-over-year rent declines. Las Vegas, Phoenix, Jacksonville, and Atlanta, some of the best performing markets of the past few years, have seen rents drop from this time last year. 
• Major and secondary tech hubs including San Jose, Seattle, Austin and Portland were some of the worst performing markets last week, as rents fell in each metro by 40 basis points or more. While tech will continue to drive our economy in future cycles, the ability for knowledge workers to collaborate remotely will likely keep a damper on the upside potential of rents in big tech hubs.