You can triple-say location as often as you want, just as long as you follow when the current trends go. After an extended period of time, now, the south and west have been the hot spots for demographic shifts in the country and, following them, demand for multifamily space.
But according to a recent Yardi RentCafe analysis, the hottest demand is shifting from the southeast to the northeast.
“North Jersey is the most competitive rental market in the U.S., outpacing the Sunbelt,” RentCafe says in its analysis of Yardi data. “Of course, the warm, business-friendly Sunbelt states have long been highly coveted renting spots, particularly during the pandemic. However, the start of 2023 saw a pivot to markets located in the Northeast. As a result, eight of the country’s top 20 hottest renting spots are in the Northeast.”
Here are the metrics they looked at: number of days apartments were vacant; occupancy percentage; number of perspective renters competing for a given apartment; percentage of lese renewals; and share of new apartments completed.
Overall, on a scale of 0 to 126 as a measure of competitiveness, the national score is currently 60. The average time to fill a vacant apartment, nationally again, was 38 days, with eight renters competing and an occupancy rate of 94.2%. About 60.7% of renters renewed, meaning many units effectively off the market to people trying to find a new apartment, and even with the seemingly large number of units that came online, they were only 0.43% of the housing supply, making a search for a new place a challenge.
It’s still less competitive than last year, when 11 renters vied for each spot and empty apartments were full again in 32 days.
Currently, New Jersey’s competitiveness score is 115. Not only are Jersey City and Newark relatively affordable, but “North Jersey has turned into a desirable location for well-heeled renters looking for nicer apartments, more elbow room and a better work/life balance while still being close to the Big Apple’s attractions.” And 72.2% of renters renewed their leases, making getting a foot in even harder.
Some of the other top 10 highly competitive sites were Miami-Dade County in Fla.; Harrisburg, Penn.; Grand Rapids, Mich.; Omaha, Neb.; Southwest Fla.; Milwaukee, Wisc.; Broward Country, Fla.; Orlando, Fla.; and suburban Chicago, Ill.
Competition for multifamily units has also increased in smaller geographic locations. “The housing crunch is particularly noticeable in quiet, little cities like Portland, ME and White Plains, NY,” the report said. “Here, a marked increase in competitivity (up by 32 and 30 points, respectively, compared to the start of 2022) pushed these markets’ RCI scores to 92 and 75, respectively, early this year.”