Top 5: Q3 Average Occupancy and Rent Declines

At the national level, multifamily average occupancy peaked in Q4 2021 at just over 94% and has steadily declined ever since. Average effective rent growth has slowed for three consecutive months now, making third quarter growth the lowest of any quarter since Q1 2021. Despite very low apartment demand for the entirety of 2022, now that third quarter numbers are in, these changes in multifamily conditions are beginning to get more attention.

A full third quarter review will be the subject of ALN’s upcoming monthly newsletter (make sure to subscribe below), so in this space today we’ll look at the Top 5 markets according to largest average occupancy decline in the quarter and largest average effective rent decline in the quarter.

For more detailed information on each of the markets listed, ALN offers complimentary Market Review reports.

Top 5 Markets: Largest Average Occupancy Decline

MarketAvg Occupancy ChgAvg Occupancy
FL - Fort Myers/Naples-5.6%86.3%
GA - Savannah-5.2%90.5%
TX - Rio Grande Valley-5.1%92.0%
SC - Myrtle Beach-3.2%91.5%
TX - Corpus Christi-2.9%88.0%

Top 5 Markets: Largest Average Effective Rent Decline

MarketAvg Effective Rent ChangeAvg Effective Rent
LA - Lake Charles-1.8%$983
FL - Fort Myers/Naples-1.0%$2,018
FL - Palm Beach-0.9%$2,378
HI - Honolulu-0.6%$2,121
NV - Reno-0.6%$1,594

For the most part, the areas that were hit especially hard in the third quarter are smaller markets responding significantly to seasonal effects with the end of summer occurring during the quarter and given the proportion of summer travel destinations on the two lists.

It is also worth mentioning that all but three business days of the quarterly data was collected prior to Hurricane Ian making landfall in the Fort Myers – Naples region. As a result, the declines observed in that market for the quarter should not be substantially attributed to the hurricane.

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