How We Rate A City
Every city page shows ratings: a color, a word and a number. Here is what each one means and exactly how we work it out. Nothing is hidden.
Four Ratings. Same Meaning, Every Time.
Every number on a city page gets one of these labels. The color and the word mean the same thing on every city page.
This number is moving in a good direction for an owner, and it is not just a one-time bump.
Still okay, or a mix of good and bad. It may be slowing down. Keep an eye on it.
This number is moving in a bad direction for an owner. It does not mean “don’t invest.” It means “look closer.”
Not a rating. It is a number for reference that is not good or bad on its own.
What Number Gets Which Rating
These cutoffs are fixed. The same number gets the same rating in every city. The rating comes from the number, not from how a city feels.
| What we check | Strong | Watch | Caution |
|---|---|---|---|
| Population growth (per year) | 1.5% or more | 0.5% to under 1.5% | Under 0.5%, or shrinking |
| Job growth (per year) | 2% or more | 0.5% to under 2% | Under 0.5%, or losing jobs |
| Rent growth (per year) | 3% or more | 0% to under 3% | Below 0% (rents going down) |
| Vacancy rate (empty apartments) | Under 6% | 6% to 10% | Over 10% |
| Average monthly rent | Always Steady (see below) | ||
Why rent price alone doesn’t get a color
An average rent of $1,549 is not good or bad by itself. It is just where rent sits today.
It only means something next to rent growth (is it going up or down?) and vacancy (are apartments filling up?). Those sit right beside it on every city page. So average monthly rent always gets the gray Steady label. If you ever see it colored Strong, Watch or Caution, that is a mistake. Please let us know.
How Four Numbers Become One Score
The big number at the top of every city page is its CoInvest Score, out of 100. It answers one question: how healthy is this city’s apartment market for an owner right now? It is simple math, then a color and a label.
- 1We look at four things: population growth, job growth, rent growth and vacancy. Each one earns points: Strong = 25, Watch = 12, Caution = 0. Average monthly rent is Steady, so it never earns points.
- 2We add the four together. The highest possible score is 100.
- 375 to 100 is a Strong Market. 25 to 74 is a Watch Market. 0 to 24 is a Caution Market.
- 4Sometimes a Watch Market city is really recovering, not getting worse: fewer new apartments are being built, empty apartments are filling back up, and people and jobs are still growing. Then we may call it an Emerging Market. It keeps the same gold color and the same score.
“Emerging Market” is the only judgment call in this system. Everything else is math. We only use it for a city already in the Watch band, never to hide a low score.
Where The Numbers Come From
Every city page uses the same kinds of sources, so a rating means the same thing no matter which city you look at. Each city page lists its exact sources and dates.
People and jobs
- U.S. Census Bureau: how many people live in the area
- U.S. Bureau of Labor Statistics: how many jobs there are
Rent and empty apartments
- Apartment research firms such as CoStar, Yardi Matrix and Cushman & Wakefield
- HUD local market reports
- Checked against at least one other local report when we can
When sources don’t agree
- For jobs, we use the survey that counts paychecks over the survey that calls homes. It is more reliable for a whole area.
- We use the newest full report from a research firm over older articles or rough estimates.
- If good sources disagree and it would change a rating, we say so on the city page.
See The Score For Your City
Pick a city to see its CoInvest Score, its five numbers and any deals in the area.