Class A Multifamily Rent Growth in the Sunbelt Beats Out Everything
Florida, in particular, saw large rent hikes.
The rich or developers catering to them may be different after all, as Class A apartment rents grew faster than the national norm for the year-over-year period ending this past April.
And where this trend is showing up the most is in several Sun Belt markets, which climbed twice as fast as the April market average. Look in particular to Florida for some significant hikes.
For the period ending in April 2023, apartment rents grew 3.2% in the country’s 150 largest apartment markets, according to a post by RealPage Analytics’ Julia Bunch. Class A rents went up more or 3.9% for the same period, an outperformance of about 70 basis points (bps).
The Biggest Hikes
Florida, the Sunshine State, had the highest rent growth. Among the state’s and Sun Belt’s superstars were West Palm Beach’s luxury buildings, which far outperformed the market average. As of April, rents across the area grew 2% on an annual basis–below the national norm of 3.2%. But in that time frame, Class A rents in West Palm Beach soared 5.4%, marking a 340-bps delta above the market average.
Tampa and Jacksonville also saw their Class A rents perform well. Tampa’s climbed 280 bps higher than the market average of 1.7% in the April 2022 to April 2023 period. And rents for Class A in Jacksonville grew at an annual 4.5% rate. Other Florida cities that saw this class of rents go up were Fort Lauderdale, Orlando and Miami.
But Florida wasn’t the only Sun Belt area to experience this upward trend. The Carolina trio of Raleigh/Durham, Charlotte and Greensboro/Winston-Salem all saw their Class A rent growths perform above their respective market averages. Atlanta’s Class A buildings also experienced growth of 2.5% year-over-year, beating their market average of 0.9% in the same period.
Texas’ Houston Class A buildings help put that state on the luxury rent-growth map, too. In fact, it was the only market in the state where Class A rent outperformed the market norm more than the national average.
Where Was There a Drop?
Underperforming Sun Belt Class A markets included Nashville, which took the deepest delta. There rents grew 2.4% compared to Class A rent growth of 1.4%. Memphis showed a similar Class A underperformance of 80 bps.