Apartment Rental Concessions Reach Two-Year High in 2023 

According to recent 2023 apartment market reports, a two-year high has been reached in apartment rental concessions, with approximately 30% of apartment listings now offering at least one concession. This trend reflects a changing dynamic in the landlord-tenant relationship, where incentives are increasingly used to attract renters.

Our own proprietary data shows that out of all the states, Texas has the highest number of properties offering concessions, with one in every two properties offering concessions, which translates to a concession rate of approximately 50.1%. This high rate indicates a highly competitive rental market in Texas.

In stark contrast, states like Hawaii (HI), Maine (ME), and Vermont (VT), with zero properties offering concessions among those surveyed, depict a completely different market scenario.

The regional trends underscore these variances further. Southern states like Georgia (GA) and Florida (FL) showing high numbers of concessions indicate robust, competitive multifamily markets. This competitiveness stems from factors like population growth, urbanization, and economic development in these regions.

On the other hand, Northeastern states like Connecticut (CT) and Rhode Island (RI), with lower concession counts, are experiencing different market dynamics. These include a more stable rental market, less demand for new tenancies, or a different approach to property management and tenant acquisition.

The use of concessions is a calculated tactic, balancing the reduced effective rent against the advantages of minimizing vacancies and maintaining steady revenue streams. This strategy marks a shift from traditional renting practices, focusing more on short-term incentives to retain long-term tenant engagement.

In regions like North Texas, landlords are increasingly offering incentives such as free rent or parking to attract new tenants. This analysis suggests that the increase in rental concessions might signal a stabilization in the rapid rise of rent costs. These “sweeteners,” as they are colloquially known, indicate a market responding to broader economic pressures and tenant affordability concerns.

On a national scale, SMART Apartment Data notes that there has been an increasing pattern in concession amounts in most states from Q4 2021 to Q3 2023. Utah, in particular, stands out with the highest increase in concession amounts. Starting at $3 in Q4 2021, concessions in Utah escalated to $17 by Q3 2023, marking a substantial rise over the two-year period.

An image showing apartment rental concessions across five different states from Q4 2021 to Q3 2023
An image showing apartment rental concessions across five different states from Q4 2021 to Q3 2023

You can find more reports on other states’ concessions by logging into your SMART Apartment Data account.

For more in-depth analysis, innovative solutions, and the latest updates on the multifamily space, please visit the news section of the SMART website.

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