Negative Rent Growth for Efficiency Units

The summer months of June, July and August saw a return to more typical demand compared to the more difficult spring months of 2020. Even so, average effective rent remained flat rather than the robust summer growth those in the industry are accustomed to. Rent performance differed quite a bit based on floorplan type, or number of bedrooms, with efficiency units being especially hard hit.

Using conventional properties of at least 50 units, let’s take a closer look at nationwide summer rent growth.

Efficiencies and One-Bedrooms

The average efficiency unit rents for a full dollar per square foot more than any other unit type. This premium makes it unsurprising that summer rent growth underperformed compared to other floorplans at a time when price sensitivity seems to be on the rise among residents. Average market rent fell by 0.5% from the start of June through the end of August. Average effective rent fell by 1.3% as both the availability of rent concessions and the average value of the discount rose for these units.

For one-bedroom units, asking rent rose slightly by about 0.3% but average effective rent fell by 0.1%. The availability and average value of rent concessions increased for these units as well, but not quite to the extent of the efficiency units. Interestingly, one-bedroom units that include a den lost 0.2% in average effective rent and saw a larger increase in reliance on discounts than either efficiency or one-bedroom floorplans. There has been some thought that these units might see an uptick in demand given an increase in remote work, but no such move was yet reflected in summer price changes.

Takeaways Episode 45

Takeaways Episode 45

In our series Takeaways, ALN Apartment Data Senior Market Analyst, Jordan Brooks, shares more insight into the final thoughts on the April 2024 newsletter article,…
Read Morearrow_forward

Two and Three-Bedrooms

Average asking rent increased by just less than 0.5% for two-bedroom floorplans during the summer, with average effective rent managing a 0.2% gain. While the one-bedroom units with a den very slightly underperformed the one-bedroom units, two-bedroom floorplans that include a den performed marginally better than two-bedrooms without a den.

Three-bedroom floorplans enjoyed the largest average rent gains of the summer, though the bar was quite low. Average asking rent rose 0.8% and average effective rent crossed 0.5% growth. Three-bedroom units including a den did not experience the same level of rent growth but did see a slight increase of 0.2%.

Want to Receive Our Free Monthly Newsletter?

If you don't already receive the ALN Apartment Data monthly newsletter, click the button and tell us how to send it to you.


Disclaimer: All content and information within this article is for informational purposes only. ALN Apartment Data makes no representation as to the accuracy or completeness of any information in this or any other article posted on this site or found by following any link on this site. The owner will not be held liable for any losses, injuries, or damages from the display or use of this information. All content and information in this article may be shared provided a link to the article or website is included in the shared content.