Apartment rents in 2017 won’t rise at the same eye-popping level as they have the last couple years, according to one firm tracking multifamily rental trends. They’re still likely to rise faster than the national average, though.
According to RealPage Inc., Sacramento multifamily rents should rise 5.6 percent next year. That would be about half of the 11 percent they rose this year, tops in the country according to RealPage and a number of other tracking firmsGreg Willett, chief economist for RealPage, said less aggressive rent growth doesn’t reflect any “red flags” of emerging weakness. Economic growth is still strong, and the rate of new apartments is expected to remain modest, he said.
“But over time, you can’t sustain the kind of numbers we’ve seen there,” he said. “Whether we start to see that in 2017, or not until 2018, is something to watch.”
Rents continuing to rise bodes well for more new apartments, with RealPage expecting Sacramento to have about 1,500 additions in 2017, up from about 1,000 this year. And while the Bay Area’s economic and rental growth have both slowed, Sacramento remains a relatively affordable market, which will mean more migration east, Willett said.
Nationally, RealPage projects rental growth of 3 to 3.5 percent in 2017. Sacramento’s 5.6 percent projection would put it at the fourth-highest nationally next year, behind Las Vegas and all the metropolitan markets in Southern California.