Rent and Operating Trends - Week of July 21st 2024

This is a narration of our weekly Rent and Operating Trends Report.

The mid-year employment numbers by metropolitan area were released last week. Job creation is one of the most impactful demand variables for multifamily because it spurs the formation of new households, helping to boost occupancy rates and absorb supply delivered to the market.

While the U.S. headline numbers have been solid, year-to-date job growth has varied significantly by market. In fact, some markets have lost jobs this year based on initial estimates. According to the U.S. Bureau of Labor Statistics, Denver, Minneapolis, San Francisco, Portland, and Cincinnati had fewer jobs at the midpoint of 2024 than the beginning of the year. 

Out of that group, Denver’s reported loss of 5,400 jobs during the last six months is the hardest to rationalize since rent levels and occupancy rates have increased during the same period based on Radix data. That result would be hard to accomplish if demand was truly that weak. While San Francisco and Oakland lost 1,600 jobs on a year-to-date basis, that is significantly better than the nearly 14,000 jobs lost in the area during the first half of 2023 when tech layoffs were prominent. 

Staying in California, Los Angeles showed one of the biggest improvements, adding almost 39,000 jobs during the last six months. For comparison, Los Angeles lost 8,000 jobs during the first half of 2023. New York led the country with 77,000 jobs createdyear-to-date, increasing its employment base by 0.8%. Washington, DC, Houston, Miami, and Philadelphia each added more than 30,000 jobs with approximately 1.0% growth. On a relative basis, Charleston and Raleigh had the strongest job growth rates, each up more than 2.0%.

Multifamily fundamentals were mostly steady last week with slight declines in some metrics. The industry is nearing the end of prime leasing season, and performance related to traffic, leases signed, occupancy, and rent should start to decelerate in the weeks and months ahead.

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https://bit.ly/Radix_Website

Explore our webpage for more insights and resources:
https://bit.ly/Radix_Website