Milwaukee’s apartment market is tightening and is now the second-most competitive in the nation, according to a new report from Santa Barbara, California-based
RentCafe.
RentCafe is a nationwide apartment listing service and is part of
Yardi Systems, a global provider of property management software.
Of the largest markets in the nation, only Miami currently has a more competitive apartment rental market than Milwaukee, according to the RentCafe report.
Compared to other metro areas in the U.S. the Milwaukee apartment market has become increasingly more competitive, according to RentCafe reports.
In December, RentCafe reported that Milwaukee’s apartment market was the third-most competitive in 2023.
In July of 2023, RentCafe ranked Milwaukee’s apartment market as the 7
th most competitive in the nation.
For the apartment market competitiveness report, RentCafe analyzed the 139 largest markets in the U.S. where data was available and ranked them based on five key metrics when it comes to rental competitiveness. Those metrics were: the number of days apartments stayed vacant; the percentage of apartments that were occupied by renters; the number of prospective renters competing for an apartment; the percentage of renters who renewed their leases; the share of new apartments completed recently.
RentCafe uses those metrics to calculate a Rental Competitivity Index (RCI) to see how competitive the U.S. rental market is. At the start of 2024, the national RCI score is 73.4.
By comparison, the Milwaukee rental apartment market Rental Competitivity Index at the start of 2024 is 87.0, second only to Miami at 91.9, and up from 76.4 a year ago.
According to the report, apartments in the Milwaukee market were vacant for an average of 37 days to start the year, up from 36 a year ago. The market’s apartments have an occupancy rate of 95.1%, down slightly from 95.8% a year ago. The apartment lease renewal rate in Milwaukee is 72.3%, up from 71.1% a year ago.
“Milwaukee shines as the second hottest rental market at the start of 2024,” the RentCafe report says. “With a flourishing job market and an affordable cost of living that only adds to its appeal, the metro presents attractive housing opportunities for renters, especially in coveted areas near major employers. At the same time, urban revitalization initiatives breathe new life into neighborhoods, attracting young professionals seeking an urban lifestyle.”
“Interestingly, although there are fewer prospective renters vying for each available unit and it takes one extra day for apartments to be occupied, Milwaukee’s rental market is slightly more competitive than it was one year ago," the report states. "This is mainly because there aren’t as many options for renters to choose from in early 2024 as there were at the same time in 2023, when brand-new apartments accounted for 0.74% of the local supply of rentals. This mix of high appeal and insufficient apartments (the share of recently built rentals accounts for 0.53% of all apartments for rent in the metro) led to 72.3% of renters in Milwaukee renewing their leases in the first months of 2024. As a result, this pushed the occupancy rate to 95.1%, which is significantly higher than the national average. Meanwhile, vacant apartments were filled within 37 days, on average, with nine applicants competing for each available unit.”
The Milwaukee apartment market will add two large apartment buildings this year:
The Couture, a 46-story, 322-unit luxury apartment tower nearing completion near the downtown lakefront, and
333 Water, a 31-story 333-unit luxury apartment tower nearing completion in the Historic Third Ward.
However, several other planned apartment tower developments in Milwaukee have been stalled as higher interest rates are making it harder for developers to finance projects.
Tim Gokhman, managing director of Milwaukee-based apartment development firm
New Land Enterprises, recently said in a LinkedIn post that the firm "for the first time in over a decade...has no planned starts or deliveries in Milwaukee in 2024." In his post he urged city officials to provide financial support for new apartment building developments.
"The world has changed," he said in the LinkedIn post. "City support is needed to make anything other than high-end projects pencil."
For small apartment rental markets ranked separately by RentCafe, Madison ranked as the 6
th most competitive small rental market in the U.S. to start 2024, with a RCI of 84.8. Apartments in the Madison market were vacant for an average of 30 days and the market’s apartment occupancy rate is 96.1%, according to the report.
