Share This
Related Posts
Tags
Southern Heat
By Erica Rascón on Feb 24, 2020 in Matrix, News
Yardi Matrix national multifamily report reveals that the southeastern markets continue to demonstrate strength. Not surprisingly, affordability and job opportunities attract renters to the region. Yet as with most of the nation, major metropolitan areas have become less affordable—and therefore less feasible—to most renters. A few surprising suburbs spark renters’ interest instead.
Old news, new spin
Most people who are priced-out of major markets make their way into the more affordable suburbs. On Seattle-based real estate brokerage Redfin, for example, the most year-over-year pageview increases occurred on cities just outside of major metros. Such suburbs might not offer the trendiest features, but affordability is a major motivator. Renters like to have money left over to enjoy after paying the rent!
None of that news is new, exactly. The trend has been gaining traction since the end of 2012. What may be more surprising, however, is that more than half of the nation’s hottest suburbs are in the southeast rather than the go-to coastal cities.
Sizzling southern markets
Though national data is sending mixed messages on growth, the southeast has performed consistently well. The average U.S. rent declined by $1 in the first month of 2020, ending January at $1,463. This marks the third consecutive month of declining rents. In contrast, year-over-year growth has hovered around 3.0%.
More than half of the top 30 markets posted year-over-year rent growth above the national average and, in a rare occurrence, zero major markets reported negative year-over-year rent growth. Just outside of these successful markets, suburbs are thriving, especially in the southeast.
Per Redfin year-over-year pageview reports, the following 10 suburbs have experienced the highest interest:
- Willowsford, Ashburn, VA (Washington, D.C. metro)
- Bal Harbour, Fort Lauderdale, FL
- Wildwood, Charlotte, NC
- West Arvada, CO (Denver metro)
- Waverly Hills, Arlington, VA (Washington, D.C. metro)
- Adamsdale, North Attleboro, MA (Providence metro)
- Poplar Grove, Indianapolis, IN
- West Ridge, Woodinville, WA (Seattle metro)
- Raleigh, Memphis, TN
- Old Town Rocklin, CA (Sacramento metro)
Half of the booming suburbs are in the southeast.
Drawn by southern charm (and affordability and jobs)
The southeast offers affordability, warm weather, and diverse opportunities for leisure. The region is full of beautiful parks, mountains, and beaches along the oceanfront and gulf coast. The pace of life is notoriously slower in the southeast, which makes it a more appealing to some people wanting to raise a family.
The strong job market is an undeniable factor in regional growth. The thriving southeastern suburbs are located near headquarters of major brands such as Microsoft and Volvo. Recently, suburbs of Nashville and Charlotte benefited from major brands relocating from cities to their quieter knolls. New York-based firm AllianceBerstein, for example, set up shop in Nashville hauling 1,000 jobs in its wake. Honeywell of New Jersey put down roots in Charlotte, bringing 750 jobs in tow. The new employment opportunities have helped to keep Nashville and Charlotte suburbs among the lowest unemployment rates in the country.
Florida metros and suburbs continue to impress, though they are showing signs of a plateau. Both Orlando and Tampa reached peak rent growth in 2015 and 2016 respectively but have simmered down to modest growth. A steady swell in supply (13,964 units in Orlando and 12,140 in Tampa, about 6% of existing stock) has contributed to the slow down in rent growth.
Forecast
Several variables effect the forecast for the remainder of the quarter. Some signs point to slowdown while others indicate growth. The upcoming election could (as it often does) cause a hiccup in summer transactions. Yet overall, development has slowed a bit, paving the way for rent growth, occupancy and a bit of optimism.
