Apartment Top & Bottom Markets, Q1 2019

Apartment Top & Bottom Markets: Effective Rent Growth

The aggregate YoY effective revenue growth for the nation came in at 4.1 percent this quarter, a little lower than last quarter’s 4.4 percent. Once again, Phoenix is in the top position in the chart, by a notable margin. Phoenix had YoY effective revenue growth of 7.8 percent, while the next market, Las Vegas, was at 6.6 percent. Atlanta, which was also in the chart last quarter, had strong performance again with growth of over 6.0 percent. In all of these metros, however, there were submarkets that performed significantly better in the approximately 10-20 percent range YoY, highlighting the importance of using higher resolution information. In fact, at a property level, Las Vegas actually had the highest median YoY effective revenue growth (6.3 percent); Phoenix was actually slightly lower at 5.7 percent.


Effective Revenue Per Unit, Percent Change 2018Q1 – 2019Q1

Source: Reis, Real Estate Solutions by Moody’s Analytics

The chart above ranks markets by their year-over-year effective revenue growth, which is calculated as the annual change of effective rent multiplied by the occupancy rate. On the left side of the chart, we have the five markets with the highest effective revenue growth, and on the right side, we have the five markets with the lowest effective revenue growth. The navy blue bars represent the metro-level growth rates, and the gray and teal bars represent the submarkets with the highest and lowest growth rates in the metro, respectively. 


On the right side of the chart, Fairfield County had the smallest overall growth rate, but it was still slightly positive (0.2 percent). As usual, no market in the bottom five had negative aggregate performance, and even the median property-level performance for all of the markets was slightly positive.


Analysis by Victor Calanog, PhD CRE®. Calanog is the Chief Economist & Senior Vice President at Reis. He and his team of economists and analysts are responsible for the firm’s market forecasting, valuation, and real estate portfolio analytics services. He holds a PhD in Applied Economics and Management Science, trained by a dissertation committee composed of faculty from the Wharton School of the University of Pennsylvania and Harvard Business School.


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