Experts Increase 2015 Rent Growth Predictions
Digested from “Apartment Market Forecast for 2015 Strengthened Again”
Axiometrics (10/5/15) Sanjay, KC
New forecasts predict 2015 will be the best year for rent growth in a decade. Estimates for the national average rent growth have been revised upward 80 basis points since the first quarter of the year to 5.1 percent.
And some cities are seeing a much greater increase that that. Among the top performing metros are Oakland, Calif.; Portland, Ore.; San Jose, Calif.; and Denver. All experienced rent growth of 10 percent or more in the second quarter, following first-quarter growth of 6 percent or greater. Most of the strongest performers are located on the West Coast, with a few notable exceptions, such as Detroit, Boston and Washington, D.C.
On the opposite end of the spectrum, four markets saw declines in rent growth from March to June: Virginia Beach/Norfolk, Va., Oklahoma City, Miami and West Palm Beach, Fla. West Palm Beach experienced the biggest change quarter over quarter — a decrease of 90 basis points — but rent growth was still greater than the national average at 5.9 percent. This drop supports observations that the Miami-Fort Lauderdale-West Palm Beach area, a previously hot market, has likely hit its affordability limits.
Activity is expected to slow across the board in 2016, with rent growth dropping to 3.4 percent in 2017. But experts anticipate a jump back to 4.1 percent in 2018 after new supply is absorbed.