Handful of Metro Areas Stand Out for Apartment Performance

Nationwide multifamily performance was stable in February with a few metro areas showing significant momentum year-to-date, the Institutional Property Advisors (IPA) division of Marcus & Millichap says in a new report. They include the San Francisco Bay Area, Chicago, Seattle-Tacoma and Washington, DC, with the Nashville metro also standing out due to pricing inching up in the face of one of the country’s most aggressive delivery volumes.

“While markets that registered the most performance momentum early this year are mostly in areas where solid results were anticipated, a handful of markets showed unexpected performance momentum in early 2024,” said John Sebree, national director of Multi Housing Division, Marcus & Millichap and IPA.

Highlights of the report include the following:

• Nationally, average monthly apartment rents have climbed $6 so far in 2024. The small improvement reverses the trend of mild rent cuts seen during the last half of 2023.

• Vacancy nationwide is holding steady with the end-of-2023 performance at 5.9%, a result the report describes as encouraging “given the big block of product completed in what is normally a slow leasing period.”

• Rents for lease renewals were also up in early 2024, helped by solid resident retention that is being boosted by a record price premium to buy housing instead of renting.

“In a particularly encouraging result, national vacancy among stabilized Class A communities was unchanged during the first two months of 2024, even when sizable rent concessions were offered at the newest luxury properties still going through the initial lease-up process,” said Greg Willett, national director, research services, IPA.

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