A new report from research firm Yardi Matrix on apartment rents in January shows some trends from last year persisting into the new one.
1. Sacramento continues to lead the nation with rent increases, up 10.4 percent in January from a year earlier. The next metropolitan statistical area with the highest year-over-year percentage growth in rent was Seattle, with 8.4 percent.
2. But Sacramento is seeing one trend suggesting some moderation. In Yardi Matrix’s tracking over the last three months, rents for “lifestyle” apartments dropped by .4 percent. Those apartments, considered places people choose to live because of their amenities rather than have to live because of economics, constitute the bulk of emerging new projects.
3. However, new projects are still a pretty small part of the overall Sacramento market. In January, they made up just .5 percent of the entire apartment stock.
4. Nationally, new supply is expected to be about 320,000 units this year, the most in the current economic cycle. New units already built are starting to affect cities such as San Francisco and San Jose, where year-over-year rents rose by 2.8 and .9 percent, respectively. Those were both below the national average of 4.6 percent.
5. Yardi Matrix projects Sacramento rents will grow by 10.2 percent this year, after double-digit growth in the last two years. With job growth at 2.6 percent at year-end, an influx of residents moving here from the Bay Area and a lack of new units continue to be the principal drivers for higher rents.
Article and image provided by: Sacramento Business Journal