In 2023, there were 440,000 new units built in the United States, boosting supply to the highest levels in 36 years. The number of apartments available for rent right now across the nation is at its highest since 1987. Another 671,000 units are planned to be completed in 2024, which will continue to drop rents in certain markets but stay flat in most markets. 40% of U.S metros saw rents decline in 2023. Experts across the country expect supply levels to dramatically decrease in 2025 and 2026, which will likely allow rents to recover and climb in those years.
This same trend holds true in Spokane County. Renters have more options right now in Spokane than they have had in a long time. Owners all over the city are forced to drop rents to fill their units or offer concessions, including months of free rent, garages included, storage units included, and even TVs being included in one unique case.
Case Study
- In 2022, a Spokane Valley 2bed/2bath rent averaged $2,300/month.
- Today, asking rents for the same units are in the range of $1,600-$1,700/month.
- This is just one example of how the high supply level has significantly impacted rents.
Markets such as Portland, San Francisco, and Seattle actually performed well in 2023, with rents increasing or remaining stabilized due to the low number of new apartment developments being delivered. Units were not built in these areas due to rent control and government red tape, which deterred investors from investing in these markets. Emerging markets such as Spokane and Boise have conversely suffered due to the new supply.
While population growth can still be positive in emerging markets, it is important for apartment investors to be aware of supply levels and vacancy rates in order to make decisions for their portfolios. Please reach out for more information!
SVN Cornerstone Multifamily Team
Nate Gant is an Advisor with SVN Cornerstone. Nate has been an active member of the Eastern Washington real estate community since 2010. He has brokered more than $100 Million in real estate transactions, specializing in land development, REO and investment properties. To get in touch with Nate, email nate.gant@svn.com or call 509.993.4440.
Jordan Lester is an Associate Advisor with SVN Cornerstone. Jordan served as a brokers assistant for 3 years with SVN Cornerstone before becoming a full time broker. Jordan specializes in the multifamily sector of commercial real estate. To get in touch with Jordan, email jordan.lester@svn.com or call 509.496.6922