Multifamily Industry Cautious On Collections In Upcoming Months
Indianapolis was the top performer of Yardi Matrix's top 30 markets and recorded a year-over-year rent growth of 3.5% last month.
As the US still faces the coronavirus pandemic and millions are unemployed, the multifamily industry is “cautious on collections” in the upcoming months as only a “minimal” amount of extra unemployment benefits are planned, according to a report from Yardi Matrix.
“Collections have yet to decline a material amount, but if unemployed Americans are left without additional stimulus in the coming months, we could see a different story play out in the fall and winter months,” according to the report.
The August report says rents nationally dipped by 0.3 percent in the year-over-year basis, but the document notes that doesn’t mean every place across the country is doing equally as bad.
“Out of our 132 Matrix markets, 108 performed better than the national average in August, leading to the conclusion that the larger markets, with significant rent declines, are pulling down the national average,” according to the document.
The Yardi Matrix report says the Midwestern capital city of Indianapolis was the top performer of their top 30 markets and recorded a year-over-year rent growth of 3.5 percent last month.
Yet, there were secondary markets that performed noticeably better compared to Indianapolis on the year-over-year metric.
“Topping the list are Huntsville (5.7%), Boise (5.1%), Fort Wayne (5.0%), Portland, Maine (4.9%) and Grand Rapids (4.4%). These markets have benefited from lower population densities, affordable housing and the ability to attract tech talent,” according to the report.
The report noted that Yardi Matrix had been watching Boise and Huntsville before the coronavirus pandemic because they think “they have all the characteristics to be included in the next set of tech hub markets.”
The document said “tech hubs” were driven in part by educated workers and were “some of the best-performing markets” before the deadly pandemic. But the document also reported that “many tech hub markets have had inconsistent rent growth on a month-over-month basis” since the start of the coronavirus pandemic.
According to the report, San Jose and San Francisco rents “have continued to deteriorate rapidly” since March, with overall rents dropping by $97 in San Francisco and $143 in San Jose.
“The three markets with the largest year-over-year rent declines remained unchanged from July: San Jose (-5.5%), San Francisco (-5.1%) and Boston (-2.5%),” according to the report.