The month-over-month rate of growth in apartment-rental costs in Arlington for April was more than double the national average, as the community stood as the 10th priciest for apartment units among 100 major urban areas nationally.
But like the nation as a whole, Arlington has a growing apartment-vacancy issue that may increase as new housing stock comes on the market, according to an analysis by Apartment List.
The county’s median apartment rent of $2,183 ($2,059 for one-bedroom units, $2,463 for two bedrooms) was up 1.2 percent from March to April, while the national average of $1,335 ($1,162/$1,332) was up 0.5 percent, according to the latest data, released April 27.
Arlington’s growth rate was ninth highest among the 100 urban areas surveyed; New York City, at 1.9 percent month-over-month growth, topped the survey for April.
Over the past 12 months, Arlington’s median apartment-rental rate has grown 4.5 percent; since the start of the pandemic in the spring of 2020, it is up 6.8 percent. For April, Arlington’s median rental price stood 12.2-percent higher than the metro area as a whole.
Currently, Arlington stands at the 10th most expensive locality in the national survey, with rents roughly on par with San Francisco. Topping the cost ranking for April was Irvine, Calif., at $3,028; residents of Cleveland pay the lowest median rental rate, $796.
The national median rent increased by a record-setting 17.6 percent over the course of 2021, as the market sorted itself out after the initial blast of COVID upended daily life. Nationally, however, year-over-year apartment-price appreciation is continuing to decelerate, with the current rate the lowest since March 2021.
“Year-over-year growth is now below the average rate from 2018 to 2019 (2.8%), and it is likely to decline even further in the months ahead,” Apartment List analysts noted, largely due to a significant inventory of new units under construction.
Once that deluge of new units arrives, “some property owners may start struggling to fill vacancies for the first time since the early stages of the pandemic,” analysts said.
Month-over-month rents increased in April in 69 of the 100 areas, down from 83 cities that saw prices rise the previous month. At the same time, 40 of the top 100 cities currently are logging negative year-over-year growth, up sharply from 28 cities a month before.
The three metros with the fastest year-over-year rent growth for April all were located in the Midwest. Cincinnati leads the pack, with prices there up by 5.8 percent year-over-year, followed by Chicago with an increase of 5.6 percent, and Indianapolis at 5.4 percent. Previously hot markets in the Sun Belt are giving back some of their past gains, with areas including Phoenix, Austin and Las Vegas seeing declines.
Of the nation’s 52 metro areas with populations of more than a million, only San Francisco has apartment-rental rates still below pre-COVID times (down 3%), and only two others – San Jose and Minneapolis – have growth rates since early 2020 in single digits (2% and 5%, respectively).
Nationally, the apartment-vacancy rate bottomed out at 4.1 percent in the summer of 2021 but has since climbed to 6.8 percent – basically in line with pre-pandemic rates.
Given the impact of new inventory on many markets, “prices may not fall further, but they are also unlikely to increase significantly,” Apartment List analysts said.
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For the full national report, see the Website at https://www.apartmentlist.com/research/national-rent-data. For the Arlington report, see the Website at https://www.apartmentlist.com/rent-report/va/arlington.
