- While the US apartment market shows signs of growth, RENTCafé ranked the most competitive rental markets in the first quarter of the year.
- Central Valley, Calif., Is the hottest rental market in the United States, spearheading a cluster of emerging mid-size hubs spread across the country.
- The mega-markets of the south are the major rental centers in greatest demand, with five present in the ranking.
Ffollowing one of the most disruptive periods of our time, at the start of 2021, the most required the locations for tenants were certainly not what you would expect.
In trying to assess the competitiveness of the 125 largest rental markets in our country, we fhimdmId-sized markets such as Central Valley, California, Spokane, WA and Boise, ID were the most sought after in the last quarter. These emerging tenant hubs share a similar history, attracting tenants from major metros with a mix of cheaper and slower living and a growing number of opportunities. Along with a shift to remote work, midsize rental centers across the country were set to take a boost in the first quarter of the year.
“The larger markets and surrounding suburbs show that tenants are clearly looking to get more square footage or more amenities for the same price, in and around these centers. Residents of large front-door markets “bargain” and, thanks to work-from-home policies, peripheral locations close to these areas also benefit from this behavior. ” said Doug Ressler, head of business intelligence at Yardi Matrix.
To rank the nation’s hottest rental markets, we looked at the industry’s most telling metrics for competitiveness:
- what percentage of apartments were occupied
- how many days the rentals were vacant
- how many potential tenants argued over the apartments
- the rental the price trend
Nationally, US apartments were vacant for an average of 39 days in the first quarter of 2021. 94% of rentals were occupied during the period, with an average of 11 competing tenants per apartment. The Rent Trend Score was 20 in the first three months of the year, showing slight growth.
The country’s hottest rental markets are emerging from mid-sized locations
The country’s hottest rental markets share one thing in common: with a few exceptions, most of them are medium in size. Central Valley, which includes booming California hubs such as Fresno, Bakersfield, Stockton and Modesto, is the country’s hottest rental market, with a competitive score of 5.5.
To see the full ranking, scroll through the table using the bar on the right.
The story of Central Valley’s meteoric rise is emerging as an archetype among mid-sized cities across the country. In a chicken and egg scenario, these markets attract a growing number of residents finding cheaper alternatives to expensive markets and moving from traditional industries (in this case agriculture and energy) to more diverse labor markets. As in the days when the Central Valley was known for its transit towns are discoloration, tenants to have increasingly eyeing this area, transforming it into the most competitive US market in the first three months of the year. Colleagues from the mid-sized California markets, Sacramento and Inland Empire, have also entered the rankings, as more and more THE and the bay area, according to RedEnd.
Spokane, WA and Boise, ID come in second and third, sharing a similar trajectory. With a competitive score of 10, Apartments in Spokane are highly sought after by many potential tenants. The region has been in the headlines since Amazon announced plans to open a new distribution center in the city, but the market has summer on the rise for a while now. Spokane’s mix of small businesses and well-paying jobs in government, medicine, and higher education has attracted residents of Puget Sound, especially the more expensive Seattle area, for years. Meanwhile, in the third row Boise, ID, became known as a relocation hub for Californians, since the region offers a balance between slow (and cheaper) living, short journeys and the conveniences of big cities.
The 30 most popular rental markets mapped by competitiveness
Five of the country’s largest rental centers are also among the top 30 hottest apartment markets, and they’re all from the south and southwest. El Paso leads this trend with a competitive score of 29.5, ranking 16th in the nation’s hottest rental market.
Phoenix, AZ, also reached the standings, with a competitive score of 39.5. The rapid growth of the Arizona Jobs Hub has attracted increasing numbers of renters from neighboring states in recent years. More recently, the growth of the technology sector of the market prompted a new nickname for the region, the Silicon desert, while the local economy has withstood the pandemic better than in other major markets.
“More Americans are getting vaccinated, employment is on the rise and hybrid work models are increasing, which shows growth for the multi-family and commercial real estate industry. The current climate increasingly indicates economic growth in 2021, offering significant and risk-free potential for the apartment market, ”Ressler added.
Florida also has two major markets in the rankings, Jacksonville and Tampa, both scoring around 40 points. These rental centers were among the fastest growing in the country for some time – Jacksonville, in particular, was the 15th fastest growing city in the nation over the past decade. Finally, Memphis, TN, follows the two closely, with a competitive score of 40.75.
RENTCafe.com is a nationwide apartment search website that makes it easy for renters to find apartments and houses for rent across the United States.
To compile this report, RENT Cafe the research team analysis Market data of Yardi Systems apartments on 125 rent US markets Data comes directly from large-scale multi-family buildings competitively leased (at market rates) (over 50 units). Fully affordable properties are not included.
The markets have been classified according to a market competitivety Goal. To calculate the competitiveness of each markete score, we ranked them according to four parameters and their quarterly averages (three months): apartment occupancy rate (occupied apartments)perspectivefive tenants through vacant unit (future tenants), average total number of vacant days (average vacation days) and annual rents trend (rent trend score). We then compiled an average ranking by assigning a 25% weight at every metric.
To assess rental trends in each market, we determined whether the annual trend in rents was up, down, or neutral for each month of the quarter and then calculated an average trend of rents score (between 78 and -78) for the three-month period. A score of 78, the maximum, indicates that rents have increased each month in a specific market, while a score of -78, the minimum, indicates that rents have decreased each month.
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