West Coast Occupancy Holding On, But Rent Growth is Soft
The West Coast is the only region across the U.S. where apartment occupancy is not falling as quickly as the national norm but, at the same time, is seeing weaker-than average rent growth. In the year-ending 2nd quarter, rents in West region markets were growing at roughly half of the rate seen in the nation overall. And West Coast rent growth is not just underperforming national norms; it’s also behind long-term regional trends. This pricing disappointment is happening despite occupancy in the West Coast falling far less rapidly than in most other regions. The only regional peers that are seeing less pronounced occupancy decline are the Midwest and East Coast. In each of those areas, however, annual rent growth is significantly stronger. Two standout market-level performances in the West Coast are San Diego and San Jose, where rent growth remains ahead of the national norm. In fact, San Diego ranks among the nation’s strongest markets for annual rent growth in 2nd quarter.
For more information on the state of the West Coast apartment market, including forecasts, watch the webcast Market Intelligence: Q3 West Coast Update.