Despite nationally slowing rent growth in Class-A multifamily product, some markets are defying the odds and posting significant Class-A rent growth.
According to data from RealPage, there are 10 U.S. metros with Class-A rent growth above 3.9%.
Those markets are: Orlando, San Jose, Las Vegas, Houston, Providence (Rhode Island), Jacksonville, Tampa, Riverside (California), Phoenix and San Diego.
Orlando and San Jose tied for the top spot posting 7.2% increases in Class-A rent growth while Las Vegas and the rest of the list posted 5.9% on down to a tie for ninth place between Phoenix and San Diego at 3.9% Class-A rent growth.
Note that most of the highest performers are, surprise, surprise, coastal markets.
Once struggling, Houston’s multifamily market is now enjoying tailwinds from thriving economy and a drop in construction volume. This has enabled Class-A operators to boost their rents by 5.1%, a much-needed comeback for the market that as recently as last year was seen as a non-starter for multifamily investment.
Las Vegas Class-A gained 5.6%, which is good for the its market, because typically, the suburban product and Class-B product outpaces Class-A. The gap is narrower as the overall metro rent growth was 5.9%.
On the flipside, there are a fair amount of key U.S. metros that have recorded flat or negative rent growth in Class-A product thanks to overbuilding.
Seattle, Chicago, Nashville and Portland, all blazing hot not but a few months ago, are now slashing their Class-A rents thanks to overactivity in the asset class.
Other big metros like Dallas, Boston, Newark and Atlanta have shown no growth in their Class-A rents, still a sign of overbuilding, just less acute than some markets.