After years of an undersupply of apartments across the country, leading to increasingly higher rents, a new survey is reporting on a what could soon be a national oversupply of apartments.
The Scottsdale-based Yardi Matrix real estate research firm is noting that an “unprecedented number of apartments are expected to come online in 2024.”
This new supply, predicts the report, Multifamily Rent Forecast Update, will “depress rent appreciation in many of the markets that saw explosive growth during the pandemic, and a handful of markets could end the year in negative growth territory.”
For all of that, rent absorption has occurred at a historic pace, with the report predicting that it will remain ongoing “in the markets that are receiving a large amount of supply, although it might take a year or so for the new supply to be fully absorbed.”
The new supply is expected to be especially vibrant in the Class A sector, meaning that increased higher rents are more likely to be seen in “workforce and Renter-by-Necessity units.”
A second trend line that Yardi Matrix is keeping track of is the “continued compression in the spread between in-place rents and asking rents.”
“Most markets still have a large gap between the two, which will continue to shrink as asking rent increases remain muted in the near term,” says the report.
The average national rent per year has increased by some 3.1% over the last decade, according to statistics, outpacing currency inflation by 40%.
By Garry Boulard
