Apartment occupancy and average rent hit record highs in August. A complex of various factors in the housing market and the broader economy have made it a very lucrative time to own multi-family real estate despite the difficulties imposed by COVID and the eviction moratoriums.
The average asking rent rose 10.3% nationally in August, according to data from the firm Real Page. This is the highest monthly increase they have ever recorded in the 20 years they have been collecting this data. At the same time, apartment occupancy rose to 97.1% in August another all time high.
One of the major factors driving up the price is all too familiar—lack of supply. There is simply a shortage of available apartments in many metro areas leading to a corresponding increase in price. This is doubly true in places with a lot of demand. The Real Page data showed that in Phoenix, Las Vegas, and Tampa, August rent increased by over 20%.
This lack of supply is compounded by many younger people moving back to downtown areas and out of the suburbs as COVID wanes and more workplaces reopen. At the same time, the incredibly competitive single-family housing market has priced out many lower and middle income families. The starter home isn’t really an option in some markets, leading more people to rent instead.
The value of multifamily properties has increased 13% since the start of the pandemic. There has been a dramatic increase in interest by institutional investors as well, who have swept in to purchase buildings from faltering smaller scale landlords.