And greetings once again to you music lovers, thrill-seekers, conversationalists all across the fruited plain. Today’s op-ed comes to us from Conor Sen at Bloomberg. Sen writes that while investors were focused on fears of a collapse in the homebuying industry, a crash in the apartment market has been taking shape…
The risks growing in the rental market are surprising because the turnaround has been so sudden. Tenants are still reeling from multiple years of steep gains. The first hints of the downturn showed up just three months ago, after weak apartment demand in the third quarter led to seasonality returning to rental prices.
It’s gotten steadily worse since then. According to Apartment List, rents fell nationally every month in the fourth quarter. Rents falling in the fourth quarter is in-line with the pre-pandemic seasonal norm, but the magnitude of the declines are bigger than what we saw between 2017 and 2019. Rents fell nationally by an average of 0.9% a month in the fourth quarter, versus a 2017-19 average that was half that. In a typical year rents grow by about 3%, so that suggests rents fell by 3% in the last three months of 2022 on a seasonally adjusted annualized basis.