California + Apartments | July 23, 2019

California Market Values Flatline Against Backdrop of U.S. Rent Growth Acceleration

U.S. rent values continued their growth streak, accelerating for the ninth-straight month, according to the June Zillow Real Estate Market Report. The median U.S. rent rose 3% on an annual basis to $1,483, with Las Vegas (up 10%), Phoenix (up 8.4%) and Orlando (up 7.4%) seeing the largest year-over-year growth.

Rents are up YoY in 49 of the nation’s top 50 markets, with Milwaukee as the only exception. Nationally, rent growth has not been this strong since 2016 when pressure in the rental market spurred record numbers of multifamily permits.

The typical U.S. home is worth $227,700, up slightly from May after month-over-month values dropped for the first time in seven years this spring. That’s a stronger confirmation that housing markets are stabilizing as opposed to on the brink of an imminent downturn, points out Zillow. Annually, home values grew 5.2%, down from 7.6% a year earlier.

Salt Lake City (up 9.3% from June 2018), Indianapolis (up 8.8%) and Charlotte (up 7.7%) saw the strongest annual home value growth, as notable West Coast markets flatlined, with Los Angeles (up 0.9%), Seattle (up 0.4%) and San Francisco (0%) experiencing minimal to no home value growth compared to last year. San Jose, which last year saw a nation-leading annual growth rate of 23.4%, was the only market to see annual home values fall – by 8.2%.

Zillow Director of Economic Research Skylar Olsen says, “As much as record numbers of new apartments led many to believe that rental markets might have become over saturated with new supply, the reality is that demographics and general economic health continue to keep the pressure on. Yes, we saw rents fall in 2018, but that was driven by the concentration of supply in urban areas and large buildings at higher end price points competing against each other. What the rental market still craves are affordable units spread across the landscape. Show me a three-bedroom apartment in a small building located near good schools and I’ll show you an older millennial with kids ready to move in.”

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About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.