Major Centers are Being Outpaced in Rental Growth

With several major centers bearing the brunt of renters moving out Q3 has seen multifamily rents flatten and secondary and tertiary markets starting to outperform the major metros.

Yardi Matrix reports a national average rental drop of 0.6% year over year. Outmigration for large markets to secondary hubs is amplifying and bedroom communities with lower costs of living are outperforming the larger centers.

In addition coastal metros are seeing inland migrations with cities such as Sacramento (5.0%), Las Vegas (3.9%) and Phoenix (3.8%) seeing better growth.

Tertiary markets are seeing a similar influx with Boise (8.1%), Huntsville (6.8%) and Portland, Maine (6.5%) leading the markets in rental growth while major centers such as New York (-10.0%), San Francisco (-8.2%), Washington, D.C. (-3.7%), Boston (-3.1%), Chicago (-2.9%) and Los Angeles (-2.8%) are seeing significant drops.

Ron Cadman is a Director of Investar USA, an active Build For Rent Development Company in the southwest United States. 

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