Rent Concessions and Market Softness Analysis

Exploration of how rent concessions affect rent statistics, potentially leading to an underestimation of market softness. Discussion on the rise in concessions and the implications for portraying the rental market's true condition. Predictions for 2024 rent prices based on new housing supply, potential demand increase, market-specific variations, and the impact of new construction on rent prices.

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Rent prices peaked in 2022 after a double-digit percentage run-up. Due to more household formation, disposable income, and remote work availability, Americans were doing whatever they could to upgrade their housing to bigger, better, and often more expensive options. But, after interest rates shot up, the economy began to cool, and work-from-home became a not-so-sure thing, Americans became more budget-conscious. As a result, vacancies rose, and rent prices began to fall. So, how close are we to seeing rent growth return?

Apartment List’s senior housing economist, Chris Salviati, joins us to share what his team has seen in the nationwide rent data. Chris looks mostly at large apartment data—the sector that’s been hit the hardest in recent years. With multifamily properties struggling to find renters and lowering their asking prices to prompt demand, you’d think the market had found a bottom—but this isn’t the case.

A tidal wave of multifamily inventory is about to come online, and when it does, multifamily investors will be forced to compete with the newest and most luxurious options on the market. Will this oversupply trickle down to single-family rentals, or will renters turn away from the A-class buildings in search of more affordable options? Chris gives us his thoughts, plus future rent growth predictions, in this episode!

In This Episode We Cover:

What happens to rent prices when 1,000,000 more multifamily units come online

Markets that have the most oversupply and could see significant rent cuts

The massive concessions multifamily apartments are giving new renters

When real estate investors can expect rent growth to pick back up

2024 rent price predictions and whether demand could come back

How single-family rental prices will be affected by multifamily’s huge oversupply

And So Much More!

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