Written by:

Andrew Bowen

Thought Leader | Strategist | Public Speaker | Health & Wellness Mentor | Entrepreneurial Team Builder

Talks about #datadriven, #innovation, #leadership, and #multifamily

Earlier today, my colleague Jay Parsons delivered an insightful post about the fact that for the first time in 13 years, rent did not go up in the month of January. Clearly a sign of a further cooling housing market and a lack of demand in the marketplace.

But it got me thinking. We all know rent is a function of the balance between supply and demand and what constitutes low or high demand is really a function of the amount of supply we need to cover.

With that in mind, the industry is on track to deliver more units this year than any other in the past 40 years. Certainly a supply pressure. 

So I decided to look at the renewal conversion ratio of Jan 2023 vs. every other JAN for the last 13 years. To my surprise, at 51.3%, JAN 23 was exactly the average of the 13-year period shown below.  When you then layer the rent growth (8.39% lease over lease in JAN 23) and consider it relative to the 0% rent growth Jay pointed out in his post, it lead me to the question……

Are we on a path to the inflection point where renewal rents are actually higher than new lease rents? Certainly not there now but renewal rents growing at 8% and new lease asking rents stagnant is a recipe for rent roll inversion.

#apartments #multifamilyinvesting #multifamily #rentalhousing

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