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Top 10 Most In-Demand Cities for Renters in the West

Plus, U.S. Apartment Occupancy at a Decade Low and 5 more Real Estate insights

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Macro Trends

Economic Watch: Robust Job Growth Keeps Fed Cautious link

  • The U.S. economy added 353,000 jobs in January, nearly doubling the expected 185,000. This surge in employment, with significant upward revisions for November and December, signals a robust labor market.

  • Despite strong job growth, the unemployment rate remained steady at 3.7%. The labor force participation rate was unchanged at 62.5%, and average hourly earnings rose by 4.5% year-over-year, indicating sustained wage growth.

  • The Federal Reserve is likely to maintain a cautious stance on rate cuts until May, influenced by the strong labor market. High capital costs are expected to temper real estate investment activity in the first half of 2024, with leasing resilience amidst an uncertain business environment.

Real Estate Trends

U.S. Apartment Occupancy at a Decade Low link

  • U.S. apartment occupancy fell to 94.1% in December 2023, the lowest since January 2014. This drop is over 100 basis points behind the decade average of 95.4%.

  • Despite a construction boom, some markets still perform well. A few smaller markets and college towns like Champaign-Urbana and College Station-Bryan exceed their decade averages by over 100 basis points.

  • The largest declines were seen in cities like Jacksonville, Phoenix, and Austin, with occupancy falling more than 230 basis points below their 10-year averages. Sun Belt markets, despite high demand, have struggled against the surge of new supply.

Top 10 Most In-Demand Cities for Renters in the West link

  • Denver leads as the most popular city for renters in the West, celebrated for its outdoor activities, arts scene, and dynamic job market. Renters are drawn to its balance of city life and nature, with the Rocky Mountains as a stunning backdrop.

  • Portland, OR, and Albuquerque, NM, offer unique living experiences, from Portland's quirky charm and green lifestyle to Albuquerque's rich Southwestern culture and sunny days. Both cities cater to renters looking for distinct cultural and environmental benefits.

  • Emerging cities like Chandler, AZ, and Peoria, AZ, highlight the growing appeal of suburban areas with their mix of urban amenities, family-friendly environments, and affordable living. These cities demonstrate a shift towards suburban living without sacrificing access to urban conveniences.

Location Specific

Pacific Northwest Apartment Rents Primed To Increase in 2024 link

  • After a period of fluctuating rents, the Pacific Northwest is set for rent growth in 2024. The region, including Idaho, Oregon, and Washington, saw rent growth slow down, with Portland experiencing a nearly 2% drop.

  • The forecast indicates a positive shift towards rent growth across the region next year. This change comes after years of deceleration, especially in major metropolitan areas.

Seattle Apartment Market Supply Taking Off in 2024 link

  • Seattle's apartment market is poised for a significant expansion in 2024, with new unit deliveries expected to more than triple compared to 2023. The city, which added approximately 6,100 new units in 2023, anticipates over 18,800 units in 2024, marking a 5% inventory growth rate.

  • This surge in apartment supply represents one of the largest influxes of new units in the nation, far exceeding Seattle's previous annual delivery record of about 11,400 units in 2019. The long-term average for Seattle's annual completions is around 5,500 units.

  • All 16 submarkets in Seattle will see new developments, with the urban core areas of Downtown Seattle and Capitol Hill/Central District leading the way, each expecting over 3,000 new units. Other areas like North Seattle/Shoreline and University District/Ballard are also set to receive significant numbers, highlighting a broad-based expansion across the city.


Roofer.com Raises $7.5 Million Seed Round link

  • Roofer.com, a proptech startup, has secured a $7.5 million seed investment to grow its re-roofing business using drones and AI. The Dallas-based company, founded in 2022, is expanding into Austin and plans further growth in 2024.

  • The company's technology employs drones to capture high-resolution images of roofs, which are then analyzed with AI to assess damage and determine the need for repairs or re-roofing. This innovative approach aims to streamline the roofing process, making it more efficient and less reliant on manual inspections.

  • Roofer.com is not just about technology; it's also expanding through acquisitions, having already purchased one of Texas's largest roofing companies. This strategy of vertical integration and expansion through acquisition sets Roofer.com apart in the proptech space, signaling a new era of AI-powered construction solutions.

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