Small NY Markets Pack Big Punch in Apartment Rent Growth
Three New York markets had standout results in rents and occupancy in May
Smaller markets are leading apartment rent growth metrics across the country.
Twenty-two of the nation’s 150 core apartment markets recorded rent growth of more than 3.5% year over year at the end of May, all of which were secondary or tertiary markets. That compares with the overall U.S. average annual rent increase of just 0.2% in May, according to data from RealPage Market Analytics.
New York markets represented three of the top 10 growth performances over the past year with rent growth of between 5% and 7% in Syracuse, Buffalo and Rochester. All three markets, which are situated along Interstate 90 in the northwest portion of the state, also ranked in the top 25 for occupancy among the 150 core apartment markets in May, RealPage said.
Limited development in these markets could be one reason for their strong rent growth and occupancy. All three markets recorded inventory growth of less than 0.5% at the end of the first quarter, compared with an overall increase in supply of 2.5% across the country during the past year, according to RealPage.
Syracuse logged annual rent growth of 6.7% as of May, ranking second only to Midland/Odessa, Texas. Prior to the pandemic, the market’s five-year annual rent growth averaged only 2.4%. The nation’s 96th-largest apartment market, with 43,000 existing units, had occupancy of 97.4% in May, leading the nation’s 150 largest markets in a tie with Champaign-Urbana, Illinois, at 320 basis points above the national average of 94.2%.
Buffalo’s apartment rents increased 5.4% in May, the fifth-largest increase nationally and above its five-year pre-pandemic average increase of 2.3%. Apartment occupancy in the market was 96% as of May, placing it within the top 25 markets across the country. Buffalo is the nation’s 69th largest apartment market with nearly 65,500 existing units.
Rochester, the 66th largest apartment market with roughly 69,000 units, boasts occupancy of 96.8%, exceeding its five-year pre-pandemic average occupancy of 95.4%. Effective asking rents in Rochester increased 4.9% during the year ending May 2024, the eighth-largest rate hike in the country. Prior to the pandemic, its five-year average increase was 2.3%.
Over the past five years, the number of existing units in Buffalo increased 3.5%, followed by Rochester at 2% and Syracuse at just 0.5%, compared to the national average increase in existing units of 10.3%. Inventory expansion in Rochester is expected to continue to be minimal at 0.3% in the year-ending first quarter 2025. Supply is expected to pick up in Buffalo and Syracuse, with growth rates of 2.1% and 1.1% respectively, but still below the anticipated national average growth pace of 3.5% in the coming year.