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Another banger from the incomparable Jay Parsons via LinkedIn. Click on Mr. Parsons name for full article and others.

While the main focus is on Austin, TX, I highlighted this research and article due to two Florida cities making the top 10 and one of those being Tampa, FL.

You’d never guess which market is seeing the most upward momentum for apartment rents right now. I sure wouldn’t have guessed this right. Are you ready for this? It’s … Austin, Texas! This may trigger some folks, so let me first explain what I’m talking about before you get too worked up.

1) This list shows the top 10 markets for MOMENTUM, measured by the “change in the change,” aka the second derivative of rent growth. Specifically, how does year-over-year rent growth in June compare to year-over-year rent growth just three months ago? Looking at June versus March, Austin improved by 360 bps!

2) Now for the context: Rents are still falling more in Austin than almost anywhere else. Same-store effective rents for new leases were down 3.9% year-over-year through June, according to RealPage. But that’s improved from the 7.5% cut recorded in March. The difference is momentum, +360 bps. (For those curious, CoStar and others show a similar upward trend in effective rent change.) So one big reason it ranks high on this list is because it had so much room to swing. But that doesn’t discount the fact that it’s finding momentum.

3) To be very clear: Apartment leasing in Austin is still a slog. It’s a renter’s market. Rents are still falling. Vacancy is still high. All because of — not weak demand (absorption has been strong), but because of what will likely go down as a once-in-a-generation construction boom. Austin has been Exhibit A for what happens when you build supply in big numbers.

4) So, once again, no one is waving a “mission accomplished” flag in Austin. It’s still rough out there for operators. But it’s likely bottomed in terms of vacancy and rent cuts, and it’s now trending in the right direction.

5) Also, I’m reminded of something one apartment exec said a while back: When Austin swings (in either direction), it goes big. It’s a volatile market, and volatility swings both ways. I suspect pricing in Austin will remain choppy for a while, but as vacancy improves, it’s worth noting that Austin is rarely a market that simply plods along at the national average pace.

6) Also: Let’s look at some other markets on this list:

a) The Bay Area trio was already hot, and it’s getting hotter. Rent growth now at 11.6% in San Francisco! (Cough, remember when the San Francisco City Council banned algorithmic pricing in October 2024 and promised that they’re “taking action locally to ensure our working renters can afford to live here”? Well, it turns out that supply/demand matters more than conspiracy theories after all.) The boom now extending to the East Bay as well.

b) Outside of Bay, most other markets on this list are, like Austin, all higher-supplied spots in the Sun Belt and Mountains where rents are still soft but are regaining some momentum: Salt Lake City, Denver, Jacksonville, Riverside, Tampa and Raleigh.

#apartments #rents