Apartment renters continue to renew their leases at historically high levels across most of the country – with the notable exception of coastal gateway cities.
Resident retention rates held roughly steady or improved in 31 of the nation’s 50 largest metro areas in October 2020 versus October 2019. Two metros – both with a heavy concentration of crucial logistics and distribution jobs – recorded huge increases, led by Riverside (11.8 percentage points) and Memphis (6.9 points). Most major metros in the Sun Belt, Mountain West and Midwest also recorded steady to improving retention.
On the flip side, apartments in coastal gateway cities continued to struggle with high turnover as renters leave for less-dense areas or move apartments at deeply discounted rates. Retention rates plunged 19.7 percentage points year-over-year in San Francisco, 13.8 in San Jose, 13.0 in New York and 9.8 in Seattle. Big drops between 5 and 7 points were recorded in Oakland, Boston, Los Angeles, Washington, DC and Northern New Jersey.
Tourism-heavy markets were expected to see high turnover, but the results so far have been mixed. Orlando and Nashville recorded moderate declines of 4.1 and 2.5 points, respectively, while Las Vegas recorded a small increase of 0.5 points.
Gateway metros typically record higher retention rates due to limited product availability, but weak demand plus high supply has flipped many of those metros to the bottom of the list nationally. Retention in October registered below 40% in San Jose and San Francisco, and came in just above 40% in Seattle and Los Angeles.
Six metros logged retention rates above 60%: Providence, Milwaukee, Miami, Cleveland, Riverside and Memphis. While most Midwest and Rust Belt metros typically record high retention due to limited new supply and a very non-transient resident base, Riverside and Memphis surged up the list in recent months due to stronger demand and limited supply.
Retention rates are calculated based on the share of renters with expiring leases choosing to renew, using rent roll data covering millions of market-rate apartment units nationally serviced by RealPage.