Residential Market Analysis

Apartment rent growth is slowing crawling back upward, inching up to a 21-month high of 1.1% year-over-year as of March 2025 thanks to robust demand starting to catch up with high supply. It's still very much a renter's market -- with a large number of units in active lease-up offering concessions + above-normal market vacancy. But the tide might be showing some early signs of shifting again. Good news: Wage growth is still far outpacing rent growth -- especially among younger workers more likely to be renters. Wage growth has outpaced new lease apartment rent growth for 27 straight months and counting. That's a win/win for renters and investors, widening the demand funnel. Notably: Class A apartment rent growth (excluding lease-ups) is rebounding first, with effective asking rents up 2.2% year-over-year on a same-store basis. By comparison, same-store rents were up 1.1% in Class B and down 0.4% in Class C. The latter group has been weighed down by high-supplied markets, where Class C vacancy has picked up and rents have fallen as the filtering effect incentivizes renters to move up market. On a market level, YoY rent change levels accelerated in 90 of the nation's 150 largest metro areas between February and March. That pickup was fairly broad, spreading from big coastal markets like New York to smaller Sun Belt boom markets like Charleston, and many others in between. Other key markets showing material upticks: Dallas/Fort Worth, Raleigh/Durham, Jacksonville and Minneapolis. Also trending notably upward (though still negative on rent change, just less negative than previously) include ultra high-supply markets like Salt Lake City, Charlotte and Austin. Meanwhile, the rent growth leaderboard remains dominated by lower-supplied markets across the Midwest and Northeast. Among larger markets, Kansas City led the way at 5% followed by Chicago and Pittsburgh. Another one climbing up leaderboard is San Jose (3.9%) as tech workers return to Silicon Valley. Obviously, there are a lot of big questions about the state of the economy going forward. That puts a big wrench in any forecast. But if the economy holds up as supply drops off, we could see rent growth continue to re-accelerate -- in line with most forecasts for 2025. We'll see...

Luxury housing markets are often analyzed through the lens of property values and investment returns. Increasingly, they reveal something broader. Many of the markets attracting significant luxury housing demand share characteristics that extend well beyond real estate fundamentals. Global connectivity, economic stability, lifestyle attractiveness, business access, and long-term flexibility are becoming increasingly important factors in where affluent individuals choose to establish a presence.     The purchase decision is often about more than appreciation. For globally mobile wealth, real estate can represent access, optionality, and geographic diversification. In many cases, buyers are not simply choosing a property. They are choosing an ecosystem that supports how they want to live, work, invest, and operate across borders. This helps explain why luxury housing demand frequently concentrates in a relatively small number of globally connected markets. The opportunity is not always tied to where wealth is created. It is often tied to where wealth chooses to position itself.

Our new paper on zoning reform and local travel is out! We use generative AI to simulate zoning reforms and examine how changes in land use mix are associated with travel distances. The analysis combines parcel-level land use data with GPS mobility records from more than 400 U.S. cities. We train a generative adversarial network to learn the relationship between land use configurations and the share of trips that occur within a 15-minute walk, and then use the model to simulate zoning reforms that increase land use mix citywide and in targeted neighborhoods. On average, a 20% increase in land use mix is associated with a 7% relative increase in short-distance trips. In about one-quarter of cities, the same increase produces gains up to three times larger. Targeting low-density or single-use neighborhoods yields improvements comparable to citywide reforms. Here is the link to the paper: https://lnkd.in/eAgKg98D Joint work with Charles QC LI Yale School of the Environment Hixon Center for Urban Sustainability

The first step to creating better planning rules is understanding the ones we have. That’s why we YIMBY Melbourne created the Australian Zoning Atlas—the most comprehensive analysis of zoning controls Australia-wide. The Atlas’s headline figure is pretty telling: more than three-quarters of all capital city residential land is highly restricted. This does not seem like a good way to build our cities! Australia needs more homes, and the first step to getting them is to make them legal to build. One of the key findings is just how restricted our smaller cities are: Hobart, Adelaide, Brisbane, Darwin, Perth. These are the cities under the most housing strain right now—and the ones that would benefit most strongly from enabling modest density of three storeys across every lot of residential land across the city. That’s just one of the reforms we model as part of the Atlas. There’s much more there, and I encourage you to take a look, via the link below. Enormous shoutout to Ethan Gilbert + Paul Spasojevic for their tireless work on the project. Thank you to the dozens of planning and econ professionals who gave feedback and helped us refine our modelling. We’ve very proud of this. Check it out here: 🗺️https://zoning.org.au 

2025 on track to be strongest year for new investment by private landlords despite challenging economics .... but >30% of homes for sale in London are landlords looking to sell .... whats going on ? The private rented sector has seen static supply for a decade as landlords buying (corporate and private) have been offset by landlords selling. Data from UK Finance on buy to let mortgages suggests 2025 is set to be the strongest year for new investment by private landlords in 4 years with up to c.70,000 new purchases - compared to peaks of c.120,000 purchases in 2015 and 2021. Landlords must be chasing higher yielding property to make the numbers stack up. The average gross yields for rented homes have increased as rents have risen faster than house prices over the last 5 years. But, the 'risk free rate' - measured by the 10 year gilt yield - has also been rising. The chart compares the trends in estimated net yields (assume 2.5% off the gross) in the highest and lowest yielding regions - the North East and London - compared to the 10 year gilt yield. The bars to the right show the variance to the risk free rate - it has shrunk across both areas and lower yields mean its negative in London. This is a challenging backdrop for investing in residential unless landlords focus on much higher yielding property, perhaps with the need for refurbishment or look to more complex sectors like HMOs. Its easy to see why London has the most homes for sale that were previously private rented - its not just the rising risk free rate, London has also under-performed the rest of the country in terms of house price inflation and rental inflation over the last decade so more landlord sales is not a surprise. The private rented sector needs more investment in supply - we have to hope that a lower risk free rate will attract more investment else landlords will focus their investment in lower value markets with higher yields or seek opportunities to drive yields through greater occupancy. #BTL #landlords #investing #housing

Rents didn’t just slow down, they hit the ceiling. And almost no one is talking about what this really means. The latest Apartment List data shows a clear pattern: after the 2021–22 surge, rent growth didn’t “cool.” It normalized back to near 0% and has hovered there for almost two years. Even the latest print sits around –0.8% YoY —, signaling a market entering a sustained low-growth phase. Here’s the uncomfortable truth: We’re not in a pricing cycle. We’re in a structural shift. For years, operators relied on rent growth to drive returns. Now? Supply, affordability constraints, and weakening household formation have created a hard cap on rent acceleration. When rents flatten, your margins flatten with them, unless you adapt. It’s frustrating because doing everything “right” still isn’t moving the needle: • Raising rents pushes out good tenants • New lease trade-outs are weaker • Concessions pop up even in strong metros • Underwriting built on 3–5% rent growth breaks instantly But there’s a strategic upside hiding underneath the pain. The investors who pivot from “rent-growth-driven returns” to “operations-driven returns” will outperform over the next cycle. Retention, renewal management, expense discipline, and value creation are becoming the new leverage. The market isn’t punishing operators, it’s forcing a higher skill ceiling. If you want to thrive in a zero-growth environment, start focusing on the levers you can control. The gap between good and great operators widens when the rent curve flattens. Source: Apartment List Rent Estimates Are you adjusting your strategy for a low-growth rental market? I’d love to hear how you're handling it. #RealEstateInvesting #Multifamily #RentGrowth #ApartmentData #AssetManagement #NOI #RentTrends

By 2030, all Baby Boomers will be 65+, with 1 in 5 Americans at retirement age. Of the original 74.1 million Boomers, ~56.4 million will be over 65. This massive shift will reshape housing: Downsizing wave — Millions will sell large family homes, increasing suburban inventory and potentially easing affordability for younger buyers. Senior housing surge — Demand for 55+ communities, assisted living, and CCRCs will soar. Current trends suggest a shortfall of 350k–600k units, creating a major development opportunity. Aging in place — Many Boomers will stay put, driving demand for aging in place (single-story layouts, grab bars, smart tech) and ADUs for multigenerational living. Industry impacts Builders specializing in accessible homes and senior communities will thrive. Remodelers offering aging-in-place solutions will see strong growth. Real estate pros skilled in senior transitions will be in demand. Walkable, amenity-rich locations will command premiums. Challenges include labor shortages, zoning hurdles, and affordability gaps for middle-income seniors. The 80+ cohort will soon double, intensifying need for care-focused housing. The housing market of 2030 will favor adaptable, senior-ready solutions. Those who prepare now—developers, investors, and policymakers—will lead the next era. Are we ready for this demographics shift? What else do we need to do to prepare?

🚀 Revised working paper on AI × Zoning! Thrilled to share a heavily revised draft—joint with Alex Bartik and Dan Milo—showing how 𝘎𝘦𝘯𝘦𝘳𝘢𝘵𝘪𝘷𝘦 𝘙𝘦𝘨𝘶𝘭𝘢𝘵𝘰𝘳𝘺 𝘔𝘦𝘢𝘴𝘶𝘳𝘦𝘮𝘦𝘯𝘵 can parse, classify, and scale housing‐regulation data across the U.S. What’s inside? • Method upgrade: We break down which AI steps add the most accuracy and release a richer public dataset (tract → zip → CBSA). • Four big facts about zoning: 1️⃣ Housing rules are multidimensional, not just “strict vs. lax.” 2️⃣ Value‑capture regs (e.g., inclusionary housing) dominate the first principal component—prevalent in high‑amenity, blue regions. 3️⃣ Exclusionary bulk regs (min‑lot sizes, procedural hurdles) form the second component—especially tight in Northeastern & Midwestern suburbs, pricing out lower‑income households. 4️⃣ A new model shows central cities lean on value capture to tax surplus, while suburbs lean on minimum‑housing rules to exclude—matching the data. Why it matters: If you think housing regulation shapes affordability and opportunity, we now have a scalable way to measure—and untangle—the specific rules doing the work. The same framework can extend to other policy domains. 📄 Paper: https://lnkd.in/giCE8Dyy 💾 Code + Data: https://lnkd.in/gQaK3kXz Feedback welcome!

This zoning cheat code almost vanished. One wrong decision would have erased it forever. Here’s how it was saved. Setup: Recently, we worked with an investor bought a boarded-up house from 1928. Abandoned. Windows gone. Stone-and-mortar foundation failing. On a large city lot, the obvious play was a teardown. But the house had character. Instead of demo, she chose a full gut rehab. Down to the studs. Everything new. Investigation: As the rehab wrapped up, she asked a smart question: “What else can this property legally become?” We ran full due diligence. Step 1: Zoning review The parcel showed C-2 Commercial zoning. Odd for a property surrounded by homes. Step 2: Zoning history The city amended the C-2 zone in August 2008. Step 3: The buried footnote Single-family dwellings that pre-date the 2008 amendment retain their residential use rights. The Twist: That old house was the zoning cheat code. If she had demolished it, the residential use right would have vanished with the dust. Commercial zoning here prohibits new single-family homes. Teardown equals deal killer. Impact: Because the house stayed: • Residential use rights were preserved • ADU rights were preserved • Multi-unit residential development became possible • Commercial standards applied where advantageous Here’s the multiplier most people miss. Under C-2 zoning: • No residential lot coverage limits • No residential setback standards That combination unlocked detached multi-unit density with no setback restrictions. The rehab didn’t just protect the investment. It dramatically increased its ceiling. Lesson: Zoning is not just what’s allowed today. It’s what history quietly protects. Miss the footnotes, and you bulldoze the profit. Thorough land due diligence doesn’t just apply to vacant lots. All land hides secrets, even properties with houses already on them. That’s exactly what we help uncover. If this story resonated, feel free to explore my profile to learn how SiteFacts helps investors and OYL builders avoid costly surprises before they become irreversible.

Housing is hot and cold these days — hot in terms of government promises, a little chillier in terms of market moves. There aren’t many who can explain that better than Brad Carr, CEO of Mattamy Homes Canada, the country’s biggest homebuilder, who joined me on stage Wednesday at the Urban Land Institute’s annual lookahead. One of the day’s main themes was “fog” — and Brad cut through it pretty quickly. Here’s what we discussed: 1. “Bigger, bolder, faster, now.” We need to build more homes, for sure, and need a different national playbook to do that. Budget 2025 offered some hope, but too much at the margins for the ULI crowd. Rental and affordable housing is critical. But so, too, are single-family dwellings, which is what the vast majority of Canadians still want. 2. Development charges, and other taxes, are the hidden drag on that opportunity. Although removing the GST for first-time home buyers was a good move, it goes only so far. One bolder idea: a two-year holiday on development charges. The system needs a jolt, to instil confidence. 3. Quality needs to be housing’s new watchword. Too much effort over the last decade focussed on getting units built — and many of them are not what people would want to call home. Make homes delightful again. 4. Modular housing isn’t just about building. It’s about engineering new supply chains. For one, modular is a form of manufacturing, and needs different approaches, including to finance. (Think inventory, not just land.) That means a lot more planning, across sectors, to ensure we have a steady and high-quality of supply of what’s needed to “manufacture” a home. No one ever scales without a strong supply chain. 5. Labour is a growing risk. One in five construction workers is expected to retire by 2030. More are being lost to the shutdown of building projects, especially in the two biggest cities. Conversely, workers losing jobs in lumber and autos could be prime targets for construction jobs. 6. Housing is now high tech. AI is now the biggest disrupter in the sector. (Quebec has an interesting approach to data lakes for the sector.) AI can scan buildings, for instance, and quickly assess what’s needed. Or help speed up approvals and permitting. 7. It’s not all gloomy. Close to 90% of young people want to own a home, which means there will be a lot of demand for housing years to come. The shape and sizes of homes will continue to change; the national imperative won’t — to ensure every Canadian can aspire to own where they live, and even imagine that home to be a source of daily delight. ULI Toronto, RBC Thought Leadership, Stephanie Shewchuk, PwC