While asking rent change across the nation’s Class A units dropped into negative territory in the past year, some markets are still making progress. At the national level, Class A rents contracted by 70 basis points (bps) year-over-year as of 2nd quarter. The largest pullbacks on an annual basis were seen primarily in markets that were already dealing with lots of supply pressure moving into 2020 (including Austin, Orlando and Atlanta), or were volatile coastal areas (San Francisco’s Bay Area). Still, despite recent setbacks, there were some markets that have maintained some strength. Pittsburgh’s Class A stock made the most progress, with effective asking rents climbing over 3% in the year-ending 2nd quarter. Many other markets still seeing healthy performances in Class A stock are located in the Midwest region and didn’t see the same level of new supply pressure as many Sun Belt and coastal markets. In the case of Phoenix, the still-positive asking rent change in luxury stock has more to do with the market’s red-hot performance prior to COVID.
