Anyone searching for a luxury apartment could find this a good time to go hunt. That's because asking rents have been slashed as a result of oversupply for the upscale market. And the situation is not expected to improve before 2025, as construction keeps going.
A new report from CoStar describes rent growth for luxury multifamily properties as "the weakest in recent memory." In the past two years, asking rent growth for all apartments plummeted from 10.3% to 0.8%. But the drop was even steeper for upscale four and five-star-rated apartments, which plunged from 11.8% year over year to -0.3% by 1Q2024.
The hardest hit region of the nation was the oversupplied Sunbelt. Here, multifamily completions surged by 78% from 2019 to 2023. And 50% more completions are anticipated for this year than in 2019.
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