Where Rent Growth Is Actually Coming From in 2024 — and What to Do About It
Headline rent growth numbers are masking a more complicated story at the submarket level. Property operators who dig past the national averages are finding real opportunities — and real risks — hiding in their own portfolios. Here's how to read the current market and position your pricing accordingly.
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The National Numbers Are Lying to You (Sort Of) If you've been watching the national rent growth indices, you've seen a familiar story: flat to slightly negative effective rent growth yearoveryear, pressure from new supply in Sun Belt markets, and cautious optimism about 2025 as the delivery pipeline thins out. That story isn't wrong. But it's not particularly useful if you're trying to price a 280unit Class B garden community in Raleigh or manage renewal exposure at a highrise in Denver. The operators who are outperforming right now aren't doing it because they read a better forecast. They're doing it because they've gotten granular — at the submarket level, the unittype level, and the lease expiration level. What the Submarket Data Is Actually Showing Take Sun Belt oversupply as an example. Yes, Austin and Phoenix are absorbing significant new inventory, and concessions are back in force in those markets. But zoom in and the picture gets more interesting.