Markets for apartments in urban cores are catching up with their suburban competitors in terms of both occupancy and rent growth, according to a new report from RealPage Market Analytics.
That marks a welcome change from the period during and shortly after the Covid pandemic when residents fled downtown for the suburbs and remote work. "Arguably, no apartment niche was hit harder than downtowns, especially in gateway markets," the report said. The exodus forced landlords in urban cores to cut rents. The trend was in evidence by 2Q 2020 and remained in place for at least another year, the report said.
By mid-2021, there was a 750-bps difference between urban and suburban apartment rents. Landlords in urban cores were trimming rents by more than 5% on an annual basis, while suburban rent growth was over 2%. Occupancy in urban cores also fell near 300 bps on average below suburban markets.
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