Nation’s Only High Supply Apartment Market to Grow Rents

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~ Gabriel Garcia Marquez

Weekly Housing Trends Data - Week Ending March 30, 2024 link

• Median listing prices saw a slight decrease of 0.6% compared to last year, marking a rare occasion of year-over-year decline. This trend suggests some easing in the housing market, potentially offering a slight reprieve for homebuyers.

• New listings dropped by 7.8% this week due to the Easter holiday, ending a 22-week streak of growth. This temporary dip is expected to correct itself, indicating the market's resilience and the transient impact of holidays on housing trends.

• Active inventory surged by 25% over last year, providing more options for today’s home shoppers. Despite this increase, the market remains tight with inventory levels still 37.9% lower than the pre-2023 average, highlighting the ongoing challenge of limited housing supply.

• Affordable inventory experienced a significant increase, with homes priced between $200,000 and $350,000 rising by 30.5% compared to last year. This growth in lower-priced homes may offer more opportunities for first-time buyers and those seeking more budget-friendly options.

• Homes spent the same amount of time on the market as last year, indicating a balanced pace of sales despite the increase in inventory. This stability suggests that while buyers have more options, the demand remains strong, keeping the market competitive.

Apartment Expenses Grow as Insurance Premiums Spike link

• Property insurance, though only 7% of total expenses, significantly impacts apartment operations as its cost share increases. The surge in insurance costs is particularly notable in the Southeast and other regions prone to weather-related damages, stressing the budget of apartment owners.

• Obtaining property insurance in areas frequently hit by hurricanes, floods, and fires is increasingly challenging. This difficulty not only elevates operational costs for property owners but also complicates financial planning and risk management in vulnerable regions.

The Nation’s Only High Supply Apartment Market to Grow Rents link

• Savannah, GA stands out as the sole U.S. apartment market to achieve rent growth alongside a more than 4% increase in inventory. Over the past year, while most U.S. markets with significant new supply saw rent reductions, Savannah saw its inventory grow by 6.5% with the addition of 2,089 units, yet still managed a 1.5% increase in rents.

• This performance places Savannah in a unique position. Among the 14 U.S. markets experiencing inventory growth above 6%, Savannah was the only one to report positive rent growth. In contrast, other markets with over 6% growth in inventory reduced rents by at least 1.5% over the same period.

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Manhattan Office Leasing Drops 23% link

• The first quarter of 2024 saw a significant 23% decrease in office leasing activity in Manhattan, contrasting sharply with the previous quarter's surge. This downturn was notable as leasing volume fell to 6.8 million square feet from 8.9 million square feet.

• Compared to the same period last year, the current quarter's leasing figures are also down by 6.6%. This decline indicates a cooling off from the end-of-2023 leasing frenzy driven by mega-leases, suggesting a shift in market dynamics or investor sentiments.

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Vidit

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