Multifamily brokers, take note. The average size of new apartments completed in the U.S. in 2016 has fallen to 934 square feet according to a recent research conducted by RENTCafé.
That’s the smallest on record in the past 10 years, and a full 8% smaller than in 2006. And while it’s not uncommon for renters to opt for smaller space in favor of a prime location, it’s not just downtowns that are hit by shrinking apartment sizes.
Using data from Yardi Matrix, an apartment market intelligence source, RENTCafé analysts examined and tracked the changes in apartment size in multifamily developments with at least 50 rental units. Contrary to what common sense would suggest, developers took away the most space from studios. And not just proportionally, but in absolute terms as well. An average studio built in 2016 is 110 square feet, or 18% smaller than one constructed 10 years ago.
Meanwhile the average one-bedroom apartment has shrunk only 42 square feet (5%) and new two-bed units are actually 14 square feet (1%) larger on average.
Southern and southeastern markets lead the pack
Developers in the Southern and Southeastern regions have the largest rentals in the U.S., with the average apartment size a hair below 890 square feet. Rentals in the Southeast in particular average no less than 974 square feet.
Many job-centric Texas metros have made it to the top 20 list of U.S. cities with the largest average apartment size, including Plano, Houston, Dallas, and Irving. Although Texas dominates the list, the star of the show is another Southern business hub. Atlanta boasts by far the largest two-bedroom apartments in the nation, and is second only to Chesapeake, VA when it comes to one-bedrooms.
For the other end of the size spectrum, we head West. Both Arizona and California challenge tenants to live large in small spaces. Three Arizona cities, Tucson, Glendale, and Mesa, are in the top five cities with the tiniest apartments, joined by El Paso, TX and Buffalo, NY.
Speaking of surprises: there are so many other cities with cramped living spaces that Manhattan is not at all outstanding in this regard. This, however, doesn’t change the fact that the borough is the nation’s tightest market with an average rent of $4,043.
What brokers need to know
Multifamily brokers should be aware of where their city falls on the spectrum. Keeping on top of the latest trends can put you ahead of the competition and help you win new business.
Brokers should also note, though, that shrinking apartment sizes are not necessarily translating into lower (or at least stagnating) rents. Apartment rents are growing nationwide, breaking record after record. Yardi Matrix data shows that the national average monthly rent was $1,204 in May.