2Q19 Witten Advisory Excerpt: With occupancy rising in so many markets, pricing power improved in most, as seen in the above table. That’s especially true for the leaders, with Las Vegas and Phoenix pushing rates by nearly 8% and gaining momentum. Atlanta increased rents by close to 5%, while the Inland Empire, Jacksonville and Orlando all slowed to 4½%. Austin jumped into the top 10 as rents increased by over 4% in the last year.
On the right, strong supply/demand trends in DC and Norfolk increased pricing power, but rent increases remained stuck near 2.5%.
At the very bottom, we find Houston, as market-wide rent increases decelerated to only 1%. We’ll see later that Houston has added a lot of jobs recently, but demand and pricing power remain meager. This reflects a theme of this report: while jobs are important, other factors such as demographics, migration patterns and competition from the rest of the housing market are also key drivers of apartment demand.