by Calculated Risk on 10/05/2022 11:54:00 AM
Today, in the Calculated Risk Real Estate Newsletter: Apartments: Net Absorption Very Low in Q3, New Construction Deliveries Even Lower
A brief excerpt:
Click on graph for larger image.
Last week, I posted a graph of the year-over-year change for various measures of rent. The Zillow measure is up 12.3% YoY in August, down from 13.8% YoY in July. This is down from a peak of 17.2% YoY in February. The ApartmentList measure is up 7.5% YoY as of September, down from 9.8% in August. This is down from the peak of 18.0% YoY last November.
Reis’ survey (dashed red) is quarterly and shows a similar slowdown in effective rents.
The bottom line is apartment demand was soft in Q3, household formation has slowed sharply, and there are a large number of apartments in the pipeline. We should see completions above net absorption soon, and the completion of all these units under construction should help with rent pressure.
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