Yardi Matrix: A Steady March for Multifamily

Yardi Matrix’s March 2019 multifamily report showed that U.S. rents remained steady, with rent increases during the month led by secondary and tertiary markets. Specifically, areas including Reno, NV, Tucson, AZ and Tacoma, WA saw a year-over-year rent-growth increase of at least 5%. These smaller markets are “producing a disproportionate share of economic and population growth,” and have low-enough rents so that increases can be done without burdening tenants, the report noted.

But, don’t count out the larger markets; San Francisco, with a 3.9% annual rent growth, and Los Angeles, boasting a 3.4% increase in rent growth, year over year, are well above the national average. Overall, U.S. multifamily rents increased by $4 in March to $1,430. However, year-over-year national rent growth fell by 20 basis points to 3.2%, with growth slightly less than the same period in 2018. The numbers “demonstrate consistent growth, although not as strong as other first quarters in recent years,” Yardi Matrix analysts said.

The takeaway from the March numbers is that dynamics continue healthy within the multifamily sector so far this year. As such, investors can choose between “potentially higher growth and higher yields in faster-growing, less-liquid markets,” or can opt for slower and steadier growth in larger, more liquid markets, the report said.

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