New Supply Predicted to Affect Rents Later This Year
Digested from Bisnow
In 2017, 320,000 apartment units will come online, according to Yardi Matrix. The company expects this new supply to affect rents later in the year.
Much of the new supply falls into the luxury category and is concentrated in a handful of markets, including Nashville, Seattle, Miami, Denver, San Antonio, Dallas, Austin and Portland. Oversupply in the luxury market is already an issue in New York and San Francisco, where high-end apartment communities are now offering concession in a fight for residents.
National rent growth for February was 2.8 percent compared with last February. However, secondary markets, like Sacramento and the Inland Empire in California, are currently experiencing higher rent growth. Year-over-year rent growth in February for those two areas is 9.7 percent and 6.5 percent, respectively.
“West Coast markets like Sacramento and Stockton are getting an in-migration of renters fleeing high rents in San Francisco, moving to more affordable Class-B and Class-C buildings that have been upgraded,” reports Bisnow.