Economic volatility continues to confuse market participants as new data fails to provide a consistent message on the health of the overall economy. A robust employment market set against declining GDP and high inflation has most stock and bond analysts scratching their heads. The Fed has made it clear they will maintain significant interest rate increases, and as a result equity markets have continued their recent sell off. The S&P 500 is down roughly 4% over the past month and roughly 12% from its recent high at the end of March. Multifamily REITs have performed even worse, as most REITs are down between 5% and 10% over the past month.
U.S. multifamily fundamentals continue to cool as the we approach the fall. For the first time since the early days of COVID-19, traffic, leases signed, occupancy, leased percentage and NER were negative nationwide level last week. Further signs of a cooling multifamily market can be seen in the annual rent growth figures, as Las Vegas and Jacksonville both posted negative NER growth on a year-over-year basis. Overall nationwide NER growth has decelerated to 3.1% year-over-year. I expect weekly performance to soften further, while annual performance will likely flatten in the coming months.
Key Takeaways – Data as of 09/11/2022
Traffic and Leases:
Occupancy and Leased:
Net Effective Rent:
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