Phoenix slowed down. There was a lot of supply there for a short period, but we’re seeing that bounce back quickly. So I’m not seeing anything that has us concerned. I think we’re getting back to our historical rates. If you go back to pre-COVID, you’re going to see seasonally the summer where there’s turnover and high demand, we’re going to see that’s where new lease is going to push up. And I think it will be across the board. Some markets will perform a little better than others. And then you get into Q1 and Q4, and you get that seasonal slowdown where on the renewal side, we think it’s going to be pretty steady. We’re at a — in the 8s in Q4, and we’re holding steady here in January. We do think it’s going to moderate a little bit as you get further out, given the loss to lease scenario laid out by Ernie.
But I think the renewal side will be more steady, and we’ll get the typical seasonality on the new lease side. That’s great for us given our historical kind of footprint in our 60 markets. It’s a nice balance.
Operator: Thank you. We now have Dennis McGill of Zelman. Your line is now open.
Dennis McGill: Thank you. Ernie, I was just hoping you can go back to that loss to lease comment. I think you said it was one to two. And last quarter, I think it was maybe 10, and there’s a couple of factors there. You mentioned you’re realizing some of it, and then some of it is just what’s going on with seasonality or market rents. Just given that there’s not as much turnover in the fourth quarter, I was wondering if you could maybe split out how much do you think of that is market versus what you’ve realized?
Ernie Freedman: Yes. And rough-rough, I think about — when we looked at it, I’d say probably about a third of it, Dennis, was we were able to continue to earn into what’s happening with leasing activity, but we did see a drop off of where market rate was in August, September of 2022 to where it ended up in December. We’ve certainly seen that already starting to work its way back up as we typically do in season, and Charles talked about our season starts a little bit sooner. But rough-rough was probably one-third, two-third, Dennis, in terms of what we were able to earn into versus where we saw some market declines from where they were in the stronger numbers in the third quarter.
Dennis McGill: And is that 1% to 2% number, is that end of the year or is that end of January?
Ernie Freedman: That would be December 31st.
Dennis McGill: Okay, thank you.
Ernie Freedman: Yes.
Operator: Thank you. We now have Anthony Powell of Barclays. Your line is open. Please go ahead when you are ready. Hello, Anthony could you please check your line is unmuted locally, we are not going any audio from the line. We’ll move on to the next questioner. We now have Jade Rahmani of KBW.
Jade Rahmani: Thank you very much. Can you comment on what you’re seeing in terms of new supply? Generally speaking, I think you made some comments about Phoenix having bounced back, but there’s still pretty record levels of both multifamily supplies expected as well as build to rent with nearly every homebuilder allocating maybe 5% to 10% of their production towards single-family for rent. What are you expecting from new supply? And I know you’re generally concentrated in infill locations, mainly having sourced properties from the existing home market. But your thoughts there would be helpful. Thank you.
