As we approach the end of the first quarter of 2022, it's time to look at which rental markets are experiencing the highest and lowest rental growth.
According to the Yardi Matrix recent report, the average asking price for a one-bedroom apartment in the United States is now $1,622. This means investors are gaining on average up to 16% more than last year, though it also means that purchasing power per square foot is also on the rise. While these growth trends are great for multifamily investments, the reality is that these trends are likely to continue to level off during this current cycle.
Keep in mind that growth in the real estate industry is not uniform across markets. Some areas are seeing much higher demand than others, which means a greater chance for growth and prosperity to happen there. This is due in part to things like job availability, weather, net migration patterns, and other quality of life factors. It’s important to observe these trends as you assess your next investment opportunities. Just because a market was “hot” before, doesn’t mean that will always continue.
Here are the 5 best and worse rental growth markets in the United States as of March 2022:
5. Las Vegas-Henderson-Paradise, NV
Year Over Year Rent Growth: 25.1%
Median Rent: $1,623
Percentage of Renters: 37.6%
4. Austin-Round Rock, TX
Year Over Year Rent Growth: 25.9%
Median Rent: $1,777
Percentage of Renters: 55.6%
3. Tampa-St. Petersburg-Clearwater, FL
Year Over Year Rent Growth: 31.10%
Median Rent: $2,114
Percentage of Renters: 33.5%
2. Orlando-Kissimmee-Sanford, FL
Year Over Year Rent Growth: 35.00%
Median Rent: $1,886
Percentage of Renters: 45.3%
1. Miami-Fort Lauderdale-West Palm Beach, FL
Year Over Year Rent Growth: 57.20%
Median Rent: $2,988
Percentage of Renters: 45.2%
The 5 Worst Markets for Rental Growth as of March 2022:
5. Pittsburgh, PA
Year Over Year Rent Growth: 7.90%
Median Rent: $1,485
Percentage of Renters: 57.0%
4. Cincinnati, OH-KY-IN
Year Over Year Rent Growth: 7.70%
Median Rent: $1,395
Percentage of Renters: 33.2%
3. Cleveland-Elyria, OH
Year Over Year Rent Growth: 6.60%
Median Rent: $1,383
Percentage of Renters: 51.1%
2. Minneapolis-St. Paul-Bloomington, MN-WI
Year Over Year Rent Growth: 5.30%
Median Rent: $1,572
Percentage of Renters: 53.3%
1. Detroit-Warren-Dearborn, MI
Year Over Year Rent Growth: 0.70%
Median Rent: $1,360
Percentage of Renters: 44.0%
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About the Author
Ellie is the founder of Blue Lake Capital, a commercial real estate investment firm specialized in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.
A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.
Ellie is the host of REady2Scale , a podcast that highlights honest, insightful, and thought-provoking discussions on the multiple approaches for successful real estate investing.
She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.
Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can read more about Blue Lake Capital and Ellie Perlman at www.bluelake-capital.com.