Property Management News

November 27, 2023

Property Management News

Let’s take a quick look at the latest stats and stories in the rental property sector.

Is the Multifamily Apartment Glut Already Over?

Rent prices have been impacted by a large release of new construction at the same time as the economy is cooling. Some expect a mild recession but would that really have any material impact on rent prices in 2024?

Rent growth has been cooling in 2023, however last month both Zumper and Zillow showed rent price growth are reaccelerating.

Overall, the market appears to be grossly undersupplied, and especially so in most housing markets. We wonder, with the end of FED rate hikes if rent prices are ready to rock again.

Here are some recent stats on the state of apartment supply in the US:

apartments being built in the United States has risen to above 750,000, the greatest level since the 1980s housing boom (CBRE)
the overall multifamily inventory in the United States will grow by 4.2% to spring 2025
multifamily housing starts grew 4.9% in October vs September
the overall vacancy rate for the multifamily sector over equilibrium, to a peak of 5.2% from 4.6%
CBRE expects rent growth of 3.5 percent for 2023, down from 6.7% in 2022 and 13.4% in 2021
60% of new units built from 2020 to 2022 are accessible to only 41% of US renters (Rentcafe)
1 million new rentals could be completed through 2025, despite economic headwinds (Rentcafe)
50+% of the total Multifamily construction pipeline Is in only 15 metros — Multifamily Executive
40.6% of construction cost is due to regulations (NMHC & NAHB survey)
construction cycle from start to finish averaged 16.5 months in 2013 while today it averages 20.5 months (+25%) (CBRE)
asking rents increased 3.23% year over year in October (Zillow)
since June, multifamily housing starts have plummeted (trading economics) despite massive demand
current slowdown in construction to persist till spring 2023 (trading economics)

More News!

Inflation cooled in October: NMHC: https://www.nmhc.org/news/research-corner/2023/inflation-cools-in-October/

Zillow Home Value Forecast: Prices to rise slightly in 2024, then fall off through 2025: https://www.zillow.com/research/home-value-forecast-october-2023-33413/

Yahoo: Foreclosures on the rise: https://finance.yahoo.com/news/foreclosures-rising-experts-means-housing-180030618.html

CalMatters: California readies to borrow $35 Billion to tackle housing nightmare: https://calmatters.org/housing/2023/08/california-housing-crisis-bonds/

Axios: Occupancy rates fall steeply in Austin TX: https://www.axios.com/local/san-antonio/2023/08/01/built-to-rent-homes-increase-san-antonio-texas

DallasNews.com: landlords offering free rent more often: https://www.dallasnews.com/business/real-estate/2023/11/22/more-dallas-apartments-are-offering-free-rent-to-lure-residents/

Crains: As rental listings climb, renters finding more perks: https://www.crainsnewyork.com/real-estate/number-available-apartments-rises-renters-find-perks

ArchPapers: NYC announced a new program that encourages New Yorkers to build accessory dwelling units (ADU) on their properties https://www.archpaper.com/2023/11/plus-one-adu-program-nyc-department-of-housing-preservation-and-development-build-adu/

CBSNews: Superheated Miami rental market finally cooling: https://www.cbsnews.com/miami/news/miami-rental-market-finally-starts-to-cool-faster-so-than-other-major-us-cites-data-shows/

Bloomberg: Miami’s inflation rate the highest: https://www.bloomberg.com/news/articles/2023-11-17/where-inflation-is-highest-in-us-miami-at-7-4-tampa-at-6-7#xj4y7vzkg

Orange County Register: California exodus is cooling off: https://www.ocregister.com/2023/10/09/exodus-cooling-817669-left-california-last-year-a-3-drop/

Seattle Times: 66% of Seattle voters vote for $1 Billion dollar homeowner levy for housing support https://www.seattletimes.com/seattle-news/voters-favoring-seattle-housing-levy-in-early-returns/

Boston Agent: Boston’s housing supply is highest in the US: https://bostonagentmagazine.com/2023/09/25/greater-bostons-housing-supply-posts-highest-increase-in-the-nation/

AZCentral: Phoenix renters finding more rental deals: https://www.azcentral.com/story/money/real-estate/catherine-reagor/2023/11/25/metro-phoenix-renters-finding-more-concessions-at-apartments/71679605007/

DSNEWS: Single-Family Rental (SFR) inventory continues to expand with a 31.5% surge in Q3 2023 compared to the previous year. https://dsnews.com/news/11-08-2023/sfr-growth-expands-in-q3