ApartmentList’s nationwide hire index dropped by 0.8 % in December, within the fourth straight month-over-month decline for the sector — and the remainder of the yr is on monitor to be equally tepid.
“The timing of this cooldown within the rental market is in line with the everyday seasonal pattern, however its magnitude has been notably sharper than what we’ve seen up to now,” Condo Listing’s analysis staff notes in a brand new report. “This implies that the current swing to falling rents is reflective of a broader shift in market situations past seasonality alone. As we look forward to the brand new yr, we anticipate that 2023 will see bargaining energy shift again to renters, and that hire costs this yr will develop solely modestly, if in any respect.”
Nationally, median condominium rents elevated by 3.8 % over the course of final yr, making 2022 the second quickest yr within the historical past of Condo Listing’s estimates going again to 2017. However the metric got here in “simply barely forward” of the three.5% charge noticed in 2018.
Rents declined in 90 of the nation’s 100 largest cities in December, led by New York Metropolis with a 3 % month-over-month dip and an ongoing calm down being noticed in Solar Belt increase cities like Las Vegas, Phoenix, Jacksonville, and Riverside, none of which have seen hire will increase of greater than 1 % over the previous twelve months.
On the flip facet, “Indianapolis has seen the nation’s quickest metro-level hire progress over the previous 12 months, with costs there up by 7.4 % year-over-year. Along with Indianapolis, 5 different Midwestern metros – Kansas Metropolis, Chicago, Columbus, Cincinnati, and St. Louis – rank among the many prime 10 for quickest annual hire progress,” the report states. “With many beforehand reasonably priced Solar Belt markets having seen rents spike by 30 % or extra over the previous two and a half years, markets within the Midwest might now symbolize a few of the final bastions of affordability, and will subsequently be drawing new consideration.”
Provide can also be easing, with Condo Listing’s emptiness index clocking in at 5.9 %, up from a low of 4.1% final fall.
“After greater than a yr of gradual will increase from a low of 4.1 % final fall. And up to now 4 months, this easing of the emptiness charge has picked up steam once more, after plateauing a bit over the course of final summer season. At the moment’s emptiness charge nonetheless stays barely under the pre-pandemic norm, however is rapidly approaching that benchmark,” the report notes.
