Preleasing for the 2024-25 school year is already off to a fast start, according to Yardi Matrix’s National Student Housing Report. Preleasing reached 25.2% for the Yardi 200 in October, which is ahead of the record-setting 10.4% pace seen one year ago.
The strong preleasing is indicative of early renewal activity and high demand for housing at major universities, with 14 schools already more than 40% preleased compared with only two schools in October 2022. This includes the University of Tennessee, the University of Wisconsin, and Clemson, which are 60% to 70% preleased.
According to Yardi Matrix, despite it being early in the preleasing season, rent growth in October was 6.6% compared with 4.7% a year ago. The average asking rent per bed was $854 in October.
“Rents for the 2024-25 school year started near where they ended the previous preleasing season but likely have more room to run, particularly in markets where preleasing is off to a solid start,” noted the report.
Rent growth is also market specific, with 37 markets in the Yardi 200 experiencing year-over-year double-digit growth, averaging 15.1% in October, while 34 markets showed declines, primarily in the -2.5% to 0% range.
As enrollment numbers for fall 2023 for the Yardi 200 schools begin to come in, they indicate a rebound in enrollment growth from 2022, which is likely benefiting the student housing market.
Final occupancy for the Yardi 200 markets for fall 2023 was 94.6% in September compared with 96.2% in September 2022. According to Yardi Matrix, this can partly be attributed to newly built properties that delivered late or struggled with preleasing. These new properties reached 81.7% occupancy for the fall semester.
On the investment side, activity is down significantly from a year ago as high interest rates hamper deals. Sixty-six dedicated student housing properties have sold this year so far, compared with over 200 at this point last year and an average of 105 by early November in pre-COVID years. Yardi Matrix noted that the price per bed also is down to $71,703 compared with $76,095 last year.
