{"id":31019,"date":"2023-10-17T21:29:02","date_gmt":"2023-10-17T21:29:02","guid":{"rendered":"https:\/\/prosfunds.com\/news\/heres-who-is-beating-florida-cities-in-apartment-rent-growth\/"},"modified":"2023-10-17T21:29:04","modified_gmt":"2023-10-17T21:29:04","slug":"heres-who-is-beating-florida-cities-in-apartment-rent-growth","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=31019","title":{"rendered":"Here\u2019s Who Is Beating Florida Cities In Apartment Rent Growth"},"content":{"rendered":"<div>\n<p>College towns, energy industry towns, Midwest and Northeast cities dominated rent price increases last month while Sunbelt rent growth that soared during the pandemic succumbed further to a heavy spate of construction.<\/p>\n<p>Twin Texas cities Midland and Odessa led the list of 20 smaller cities Dallas-area apartment software firm RealPage analyzed, posting rent growth of 13.8% last month from a year ago for new apartment leases. The oil drilling cities rival the double-digit rent growth Florida cities were showing in 2021 and into last year. Madison, Wisconsin, home to the University of Wisconsin\u2019s main campus, followed Midland\/Odessa with an 8.8% gain.<\/p>\n<p>Rent prices in the smaller markets didn\u2019t rise because of exceedingly strong demand for apartments. They had enough economic activity to fill apartments at a pace that exceeds the supply of existing apartments. None of the markets have substantial pipelines of new apartment construction to staunch rising rents.<\/p>\n<p>\u201cIt\u2019s really more of an absence of supply story,\u201d Carl Whitaker, RealPage\u2019s director of research and analysis, said in a web presentation on market conditions last week.<\/p>\n<p>New Haven, Connecticut, had the lowest year-over-year growth among the 20 cities RealPage tracked at 4%. But that topped big markets such as Miami, which had 1.2% growth in September, and Orlando where asking rents dropped 2.4% from a year ago, according to Apartments.com\u2019s latest report. Both cities lead the country in double digit rent growth in late 2021 and into last year.<\/p>\n<p><fbs-ad position=\"inread\" progressive=\"\" ad-id=\"article-0-inread\" aria-hidden=\"true\" role=\"presentation\"><\/fbs-ad><\/p>\n<p>Apartment rents soared in large Sun Belt markets where job and population growth erupted over the past several years, mostly in Florida, Texas, North Carolina, South Carolina, Tennessee and Georgia. Demand had overwhelmed the supply of existing apartments.<\/p>\n<p>Developers responded with historical levels of new apartment construction, ultimately subduing the blistering pace of Sun Belt rent growth. Demand for apartments fell off last year as renters stayed put worries about the economy.<\/p>\n<p>Overall demand has increased for apartments across the country through this year\u2019s first nine months following the lackluster 2022. Jay Parson, RealPage\u2019s chief economist, said during the presentation that \u201cwe\u2019re seeing that people are starting to feel better about the state of the world and their position in it.\u201d<\/p>\n<p>Inflation slowing has been a big factor. The Conference Board\u2019s consumer confidence index hit a two-year high in July, although it has since fallen some because of rising gas prices and cost of groceries.<\/p>\n<p>But the revived demand remains far below the amount of new supply coming after construction hitting historical levels in 2022. Higher interest rates have slowed construction starts. If demand continues rising, it may narrow the gap with supply next year and into 2025.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">The Same, But Different<\/h2>\n<p>Job growth of some kind has been a factor for many markets across the country, but in varying degrees.<\/p>\n<p>Midland\/Odessa has no units under construction. But demand for apartments is there for the time being with oil prices running higher. The oil and gas business brings in jobs when oil prices are high, and the jobs go away when oil prices drop.<\/p>\n<p>\u201cIt\u2019s a perfect case study for economics,\u201d Sam Tenenbaum, a Cushman &amp; Wakefield economist based in Austin, Texas, said in an interview. \u201cIt\u2019s one of the most volatile rent environments in the country.\u201d<\/p>\n<p>Rent growth was higher in 2018, a time before the pandemic that saw a booming oil and gas business. The pandemic pummeled rents after oil prices plunged.<\/p>\n<p>South Florida pulled in a lot of jobs from the Northeast and Midwest because of the the weather and an environment that is considered friendlier on business taxes as well as no state income tax.<\/p>\n<p>Miami has 31,631 apartment units under construction, or 26% of 120,317 existing units, according to Cushman &amp; Wakefield. Austin, Texas, another strong apartment market, has 41,972 units under construction equal to 15.7% of existing units.<\/p>\n<p>Cushman &amp; Wakefield\u2019s data covers apartment properties that have 50 or more units, which are generally considered investment grade. Other sources include all apartment property under 50 units. Most, if not all, new construction apartments are investment grade.<\/p>\n<p>Higher vacancy typically follows a large construction pipeline. Austin\u2019s vacancy has been rising over more than a year and now sits at about 10% for the third quarter. That has led to asking rents dropping 4.8% year-over-year last month, the biggest decline among the 40 major markets Apartments.com tracks. Miami is up to 6.5% after hitting historic lows during the pandemic.<\/p>\n<p>By comparison, in Madison, brokerage firm Cushman &amp; Wakefield\u2019s latest apartment market report shows 2,593 units under construction, which represents about 4.4% of the existing 57,288 units. Madison has had a modicum of job growth.<\/p>\n<p>Madison\u2019s vacancy is at 3.5% for the third quarter, according to Cushman &amp; Wakefield, rising at a slower pace because of the relative dearth of construction. The metro\u2019s job growth has been trending in a positive direction for several years, shooting higher than pre-pandemic levels in 2021. Unemployment hit a decade low in April at 1.6% but rose to about 3% in August, which was just below the national average of 3.8%.<\/p>\n<p>The city also has the largest campus in the University of Wisconsin system. Fall enrollment this year was 1.3% higher than last year at 50,255 students, which puts pressure on the local apartment inventory.<\/p>\n<p>There\u2019s a shortage of student housing but more private development is coming. Developers have 4,480 beds on the way, putting it seventh in the country for supply, according to Atlanta-based student housing analytics company College House.<\/p>\n<p>Similar dynamics played out in College Station, Texas, home to Texas A&amp;M; Lexington, Kentucky, home to the University of Kentucky; Champaign-Urbana, Illinois, home to the University of Illinois; and Fayetteville, Arkansas, home to the University of Arkansas; and Lincoln, Nebraska.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Auto Manufacturing Job Growth<\/h2>\n<p>Beyond the college towns, cities such as Youngstown, Ohio, and Columbus, Georgia, showed rent growth amid jobs coming from auto manufacturing.<\/p>\n<p>General Motors and South Korean company LG opened a battery plan in Warren outside Youngstown in 2022 bring jobs that helped modestly reverse a near decade long slide in jobs. GM had shut its auto plant in the area in 2019 after 53 years, an operation that had dwindled to just a few thousand workers from a height in the 1970s of about 15,000.<\/p>\n<p>Taiwanese electronics maker now owns the plant and plans to being assembling electric vehicles for startup Fisker in 2025. Youngstown hasn\u2019t had many new apartment units in more than a decade, and there\u2019s no construction now.<\/p>\n<p>Rent growth in Columbus, Georgia, about an hour and a half south of Atlanta, was 4.5%. It is getting modest job growth from Hyundai opening a KIA plant along Interstate 85 in 2009 in West Point. Supplies followed to bring more jobs. In July, Hyundai announced a $200 million expansion to build an electric vehicle.<\/p>\n<p>Alpharetta, Georgia-based Imperium Development is building the largest apartment project of three currently underway in the area. Its 300-units are set open next March.<\/p>\n<p>\u201cThere\u2019s been no new apartment product built down there\u201d since the Great Recession in 2007-2009, Greg Power, managing principle in Imperium, said in interview. \u201cNow, the next challenge is overcoming municipal infrastructure issues such as sewer.\u201d<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.forbes.com\/sites\/richardlawson\/2023\/10\/17\/heres-who-is-beating-florida-cities-in-apartment-rent-growth\/\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>College towns, energy industry towns, Midwest and Northeast cities dominated rent price increases last month while Sunbelt rent growth that soared during the pandemic succumbed further to a heavy spate of construction. Twin Texas cities Midland and Odessa led the list of 20 smaller cities Dallas-area apartment software firm RealPage analyzed, posting rent growth of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":31020,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[38],"tags":[],"class_list":{"0":"post-31019","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Here\u2019s Who Is Beating Florida Cities In Apartment Rent Growth | Prosfunds<\/title>\n<meta name=\"description\" content=\"College towns, energy industry towns, Midwest and Northeast cities dominated rent price increases last month while Sunbelt rent growth that soared during\" \/>\n<meta name=\"robots\" content=\"index, follow, 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