Yardi Matrix says it expects rent growth to continue moderating during the first half of the current year, given a large amount of new supply that's scheduled to come on line and the need for apartment owners to compete in order to maintain high occupancy levels. Growth should get a boost in the second half of '17, though, “as the impact of economic stimulus takes effect and the increase in new supply begins to slow.”

Several economic factors have resulted in net positives for the multifamily sector and prices in core markets are at an all-time high. But just how long can the market continue on this trajectory? Join us at RealShare Apartments East on Feb. 28 and March 1 for insights on succeeding in the right markets as well as navigating and finding opportunities in the more challenging ones. Learn more.

SANTA BARBARA, CA—Apartment rents dipped by an average of $4 per month in December, representing the fourth consecutive month of declines, according to data from Yardi Matrix. However, 2016 overall was a strong year for rent growth, and even with the slight decline, rents were still up an average of 4% on a year over year basis as of Dec. 31.

December's Y-O-Y increase represented a 30-basis-point decline from November and a 270-bp drop from the recent high of 6.7% in October 2015. While some of the drop seen in December can be attributed to normal seasonal factors, “it is clear that rents are in a period of deceleration after growing at high levels for the previous two years,” according to the latest Yardi Matrix monthly report.

That being the case, “As we have stressed in recent months, fundamentals remain sound and deceleration is not alarming, given that gains remain well above the long-term 2.3% average,” the report states. “The current level of growth is on par with our forecast for 3.9% increases in 2017.”

The new year will see the inauguration of a new president with a different set of priorities than the current administration. Accordingly, says Yardi Matrix, “this year remains difficult to predict, what with the prospect of major changes in taxes, tariffs, regulatory policy and foreign policy. That said, with the economy creating jobs at a two-million-per-year rate and GDP growth showing strength, we expect no let-up in apartment absorption.”

Yardi Matrix says it expects rent growth to continue moderating during the first half of the current year, given a large amount of new supply that's scheduled to come on line and the need for apartment owners to compete in order to maintain high occupancy levels. Growth should get a boost in the second half of '17, though, “as the impact of economic stimulus takes effect and the increase in new supply begins to slow.”

Several economic factors have resulted in net positives for the multifamily sector and prices in core markets are at an all-time high. But just how long can the market continue on this trajectory? Join us at RealShare Apartments East on Feb. 28 and March 1 for insights on succeeding in the right markets as well as navigating and finding opportunities in the more challenging ones. Learn more.