Rent and Operating Trends Week of September 11th

Key Takeaways – Data as of 09/11/2022

Traffic and Leases:

• Traffic nationwide dipped below 8 tours per property last week for the first time since February. 
• Texas metros including Dallas and Houston remained the most active from a traffic perspective, as each metro averaged more than 10 tours per property last week. However, even in these heavily trafficked areas, tours are slowing down from a few months ago.
• Leases signed also fell last week, as fewer tenants are committing to new apartment units.
• Of the top 30 metros, only Jacksonville, Salt Lake City, and Charleston saw leasing activity increase on a weekly basis.

Occupancy and Leased:

• The national occupancy rate fell 2 basis points last week and currently sits at 95.2%.
• Las Vegas, a market that has been struggling for much of the past year, has a market-wide occupancy rate of 93.9%, the lowest of any top 30 metro. Occupancy in Las Vegas has fallen 3 percentage points over the past 12 months.
• Leased percentages are falling as well, as the national leased percentage dropped 9 basis points last week. The gap between leased percentage and occupancy has started to narrow as fewer new leases are signed each week.

Net Effective Rent:

• NER declined 10 basis points nationwide last week and has fallen 50 basis points over the last six weeks. Over the same six weeks, revenue per available unit has dropped 60 basis points, reflecting the declining occupancy on top of falling rents.
• As a result of softening fundamentals, concessions have also increased. Nationwide, concessions were up 8.4% last week.
• Austin, Las Vegas, Riverside and Phoenix, all markets that have outperformed their larger peers in recent months, led the nation last week in concession increases, as concessions grew at least 40% in each market.
• San Francisco and San Jose maintain some of the highest average concessions in the nation at $114 and $48 respectively. Even given the relative cost of rent in the Bay Area, these two markets have some of the highest concessions nationwide, as demand in the tech heavy markets continues to struggle due to limited return to office mandates for many tech firms.