Multifamily cost per unit remains above pre-pandemic levels nationwide, but operating expenses have moderated significantly over the past year, according to a RealPage market analysis.
Along with all sectors of the economy, multifamily faced surging inflation following COVID-19. Owners and operators of market-rate properties saw operating expenses per unit increase by 24.4% between 2021 and 2024. That compares with 18% cumulative growth in the three years leading up to the 1st quarter of 2020.
This cumulative growth is not surprising considering OPEX growth peaked in 2023 at 8.6% year-over-year, which was more than double the national norm between 2015 and 2019 of 3.5%, according to the report. But now, the pace has slowed to its lowest level since early 2021, sitting at roughly 39% above pre-pandemic levels, RealPage said.
Recommended For You
Utilities and payroll were the only two operational expense categories of nine tracked by RealPage that didn’t moderate over the past 12 months. Insurance growth showed the steepest decline at 7% on an annualized basis during the first quarter, reversing a 33.5% increase one year earlier.
Taxes, which account for about 30% of total OPEX costs, registered a substantial drop in growth. The cost of taxes per unit nationwide fell 50 basis points year-over-year in March, after growing nearly 4% annually on average a year earlier.
Expense growth has fallen in all regions across the country compared with 2023 and 2024. Two-thirds of them registered a Q1 annual average expense growth below their average growth between 2014 and 2019, said RealPage.
Expenses grew only 15 bps in Texas, the smallest expense change across the country, followed by Florida with an average of less than 1% annually.
“Florida easily outpaced all other regions when you consider that the 40 bps annual average growth rate today is 10 points below what the region registered just one year ago,” said the report.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
