Supply Hits Occupancy, But Rents Advance
Multifamily fundamentals were still mixed in St. Louis at the end of the first quarter but remained relatively sound, according to the latest Yardi Matrix St. Louis multifamily market report. Rents grew by 0.4% on a trailing three-month basis through March, to $1,236, double the U.S. rate of growth. Year-over-year, the market recorded a 3.1% increase—among the country’s best—while the U.S. rate rose 0.9%, to $1,721, as noted in the national multifamily report. Last year’s robust deliveries left a mark on occupancy, which slid 160 basis points in the 12 months ending in February, to 93.3%.
St. Louis unemployment rose to 4.0% in February, recording the highest rate since August 2021. The metro wasn’t far behind the U.S. (3.9%) but lagged Missouri (3.3%), according to preliminary data from the Bureau of Labor Statistics. In 2023, job growth decelerated to 1.7%, or 25,900 net jobs gained, trailing the 2.0% national rate. Two sectors lost jobs: professional and business services (-1,000 jobs) and government (-600). Last year, economic expansion mostly came from education and health services (10,500 jobs) and leisure and hospitality (9,000).
Developers delivered 946 units in the first quarter and had another 5,306 under construction. Despite relatively solid numbers, development is softening, as no new projects were recorded during the same period. Transactions also dwindled after a strong 2023. First quarter multifamily sales totaled just $71 million, for a price per unit that fell 27.6% compared to 2023’s total, to $109,169 as of March.
Read the full St. Louis Multifamily Market Report: May 2024
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