October 26, 2021
A recent analysis of multifamily markets and rent growth among 50 of the largest metropolitan statistical areas in the United States, shows that rents grew over 10% from Q1-2020 to the end of Q2- 2021, but many metro areas included in the analysis far outpaced that rate of growth.
Tampa-St Pete 2nd Highest Rent Growth in the US Q1 2020 to Q3 2021
The Tampa Bay metro area ranks No. 2 out of 50 MSAs in the country in terms of apartment rental-rate growth since early 2020.
The time period used shows how rental rates have changed since the Covid-19 pandemic. In early 2020, the multifamily industry paused for a moment, unsure if rents would be collected or what would happen to occupancy. Most secondary markets were stagnant but gateway markets, such as New York and San Francisco, suffered losses as people exited denser markets.
Then, in the second half of 2020 and into 2021, pent-up demand and relocations — some motivated by the pandemic — put the market into overdrive. In 2021 especially, apartment rental rates have been on fire, propelled by demand, new construction, and emerging rental product types, such as single-family rentals, that command higher rates.
The Tampa Bay metro area came in second across the nation, with a 23.6% change increase in rent from the start of 2020 to the third quarter of this year. The average rent in the area is $1,556 up from $1,258 in Q1 2020.
Rental-rate growth is expected to continue in Q4 and into early 2022 but multifamily industry executives say the current pace of growth isn’t sustainable. As we head into 2022, it will be interesting to see what kind of growth will occur, especially in the hot Sun Belt cities that see dozens, if not 100-plus, of people move to those metro areas by the day.
The challenges in the rental market today also prompt a bigger question about affordability and displacement.
Among the 50 Top MSAs, seven had average rental rates that were below $1,000 per month in Q1 2020. Today, not a single market among the 50 is below $1,043 per month.
Top 10 Multifamily Markets Based on Percentage Increase During the Time Period Specified
- Phoenix-Scottsdale +26.2%
- Tampa-St Petersburg-Clearwater +23.7%
- Jacksonville, FL +23%
- Riverside-San Bernardino + 22.6%
- Las Vegas-Henderson +22.5%
- Salt lake City +19.8%
- Sacramento-Roseville +19.8%
- Atlanta-Roswell 7%
- Ft Lauderdale-Pompano Beach +19.5%
- Greensboro NC +19.2%