Alaska Income Property: Rents and trends

ANCHORAGE, ALASKA, March 25, 2023 –

According to the National Multifamily Report from Yardi Matrix, multifamily asking rents held steady in February, with a national average rate of $1,702 for the second consecutive month. More on that report in the last two paragraphs.

In South Central Alaska rents often move seasonally (lowest in deep mid-winter - and highest in peak mid-summer). But in year over year - rents have driven up dramatically. I touched on this trend in a recent post I did here on biggerpockets.com. 

In short - rents exist as a market - just like home prices - and they rise and fall with supply and demand. Think about the demand for a condo in Whittier (pictured) or in Girdwood - sales prices and rental prices move with supply and demand. Staying on top of rent movements and seeking to understand where they may go informs a succesful investors decisions. 

One popular way to create profit margin is to do a value add investing - where you take something that people want - improve it - and capture a positive return on investment. 

Nationally, year-over-year growth continued to decline as the economy adjusts to the post-pandemic period, now at 4.8 percent nationally, down 70 basis points from the previous month and the lowest level in almost two years. While asking rent growth remains positive year-over-year in nearly every major metro, 23 of Matrix's top 30 metros recorded negative growth over the last three months, with 17 being negative in February. Despite the historical trend of minor rent growth gains in February, multifamily rents have remained level over the seasonal winter slowdown.

The report raises questions about whether demand and rents will pick up as normal in the spring, noting that demand has decreased from 2021 levels, though it remains positive in most markets. Single-family rental market rents remained flat, averaging $2,071 in February, with year-over-year growth falling to 3.4 percent, far below the 14.8 percent growth rate a year ago. The report emphasizes that near-term performance will depend not only on demand-supply dynamics at the local level but also on affordability and the economy. Report data is sourced from yardimatrix.com.

Interested in where we see rents at today, or how to explore real estate investing - please contact us to learn more: jamie@vestedalaska.com // (907) 232-7183