A fall edition of the Yardi Matrix multifamily report was recently released in October, and overall there are positive take-aways. We look at what multifamily saw this fall in today’s BAM Blog…
You can read the Yardi report in its entirety here. Some of the key points are:
- Although rents remained flat in September, refusing to rise, October saw some incremental rent growth. The average rent went up by $1 and year-over-year remained at 3.2%.
- The multifamily market is still producing strong rent growth, with year-over-year of 3.3% in 17 major markets.
- In the Southeast, Phoenix and Las Vegas are the top year-over-year rent growth cities, across the asset classes.
- The report notes (with some concern) that new legislation has limited rent growth in some states – which will ultimately affect new unit construction.
- California, New York, and Oregon are states listed to have new rent-growth laws in place, with the report noting that at least a dozen other states have similar laws under consideration.
- In addition to California setting a rent cap at 5% plus inflation, the state also made eviction more difficult.
- The report notes that New York’s law is the most strict, with rent increases being limited by a rent board (often 1-2% annual).
- The report notes that in order to address the affordable housing shortage, legislatures would do better to make it easier to build units that low/middle-class houses can rent, allow more density, get rid of red tape for developers, etc.
- In other markets, for Necessity Renters, Colorado Springs saw the highest year-over-year growth with7.6%, followed by Tucson with 6.6%. For Lifestyle Renters, Albuquerque led the pack with 7.6%. Overall year-over-year growth was also Colorado Springs, with 6.3%.
- BAM’s own home city of Indianapolis came in on the year-over-year growth solidly in the middle: 4.1% for overall, 3.7% for Lifestyle Renters, and 4.7% for Necessity Renters.
The BAM Bottom Line:
High demand has helped keep the multifamily market performing well, into its fourth quarter. The Yardi report notes that some cities’ attempts at addressing the affordable housing crisis may actually cause more problems than it solves. Overall, a largely positive report for this late in the year.
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