The multi-family market continues to enjoy steady growth, and demand is high nationwide, despite an increase in new properties. Cap rates in primary markets are at 4-5%, while secondary cities including Houston, Las Vegas, San Antonio, Raleigh-Durham, Pittsburgh, Nashville, and Cincinnati stand slightly higher, at 5-6%.

Multi-family rent growth maintains its pace and doesn’t show signs of slowing down in the near future. U.S. rent growth increased twenty basis points to 4.3 percent in 4Q 2015. This is the largest gain since 2008. All of the major markets saw rent growth, and in the primary cities growth was well above the national average.

Vacancy rates overall are inching up, which may signal a slowdown in construction for the coming year –particularly in the primary markets, but will not squelch rent growth in general.

Read on for a snapshot of rents in various areas of the country. The National Multi-Family Housing Council provides these median rent prices for 4 major regions.

 

Northeast      $1,030
Midwest $740
South $880
West $1,020

 

Northeast

Multi-family properties in this region lead the country in rent prices. The median of $1030 is considerably below the rate in primary cities, where averages are closer to $2000.  Some figures from markets in this region: New York City $3350, Boston $2604, Washington DC $1947, and Pittsburgh $1023.  These figures reflect a higher proportion of luxury properties being offered in some markets, particularly NYC.

West

San Francisco and Seattle-Bellevue led the nation’s primary markets for the last quarter, with rent growth of 10.1 and 8.4 percent, respectively. Reports name other western markets that saw sizable gains in rent growth: Silicon Valley, Portland, Sacramento, and Oakland-East Bay, where gains were between 6.3 and 8.5%. These markets are growing rapidly and properties are in high demand, in part due to tech industry jobs that pull well-paid workers into these markets.

While still below the Northeast on average, rents in many western markets are at a premium. Here are some median prices in western markets.  San Francisco $3484, Los Angeles $2231, Seattle $1745, Las Vegas $1067, and Phoenix $1082.

South

Charlotte led the way in rent growth for this region, at 5.9%, while Atlanta, Orlando, Fort Lauderdale, Nashville and Raleigh-Durham each saw rent growth gains above 4.9 %.  Markets in the south lead the U.S. in absorption rates, with Raleigh-Durham on top of that scale at 4.2%.

A snapshot of median rents for this region: Miami $2511, Nashville $1246, Dallas $1493, Atlanta $1419, and Charlotte $1117.

Midwest

Median rents in this region are the lowest in the country, but strong growth is seen in specific cities here, particularly Denver and Minneapolis, which saw growth rates of around 10% last year. Some representative median rents in the past year for the Midwest: Chicago $1956, Denver $1526, Minneapolis $1225, St. Louis $879, and Cincinnati $858.

The consensus appears to be that sustained rent growth will continue, even as vacancies slowly increase. Absorption will decline in major markets, but in areas with strong job growth the demand for multi-family space will continue to drive up rents. If you want to stay current on your markets and how they are trending, check to see if your company is one of our preferred partners which gives you access to a free geo-located news tool and account.





Start Using REscour Today




One thought on “Breaking Down 2016 Multi-Family Rent Trends by Region

Wonderful items from you, man. I’ve take into accout your
stuff prior to and you are simply extremely fantastic.
I actually like what you have received right here, really like what you’re stating and the way by which you are saying it.
You are making it entertaining annd you continue to care for to stay it smart.
I cant wait to learn much more from you. That is actually a tremendous web
site.

Leave a Reply

Your email address will not be published. Required fields are marked *