Multifamily Rents Retreat As Supply Overwhelms Tempered Demand

Sun Belt Markets That Led Rent Growth Last Year Now See the Fastest Decline

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Looking at the sequential quarter-over-quarter rent change by market, the sudden change of fortune in Sun Belt locations stands out. The bottom six markets on the list, Orlando, Austin, Las Vegas, Nashville, Raleigh and Phoenix, had all been growth leaders at the start of the year. Markets holding up the best at the end of the third quarter with positive quarter-over-quarter growth are anchored by the slow but steady Midwest and large gateway markets in which supply and demand has remained closer to equilibrium and with less downside risk of overbuilding. 

The about-face change of supply overwhelming demand so far this year has rents retreating across the nation. With supply additions poised to hit 107,000 units in the fourth quarter, the current market trend of rents retreating should continue for the remainder of the year. 

Credit: Jay Libik, National Director, CoStar Multifamily Analytics. 

(Posted with permission from CoStar)