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April 2023 ยป thefivestar.com 77 J O U R N A L April 2023 Rental returns increase in most counties analyzed Potential annual gross rental yields for 2023 have increased compared to 2022 in 192 of the 212 counties analyzed in the report (91%). They are led by Orange County, California (outside Los Angeles) (yield up 42.7%); San Mateo County, California (outside San Francisco) (up 41.6%); Suffolk County (Boston), Massachusetts (up 41.2%); New Castle County (Wilmington), Delaware (up 40.5%); and San Francisco County, California (up 38.1%). Aside from Orange County, the biggest increases in potential annual gross rental yields from 2022 to 2023 among counties with a population of at least 1 million are in Miami- Dade County, Florida (yield up 34.1%); Broward County (Fort Lauderdale), Florida (up 32.4%); Santa Clara County (San Jose), California (up 30.1%); and Palm Beach County (West Palm Beach), Florida (up 29.5%). The only counties with a population of 1 million or more showing decreases in potential gross rental yields from 2022 to 2023 are St. Louis County, Missouri (yield down 19.8%); Nassau County, New York (outside New York City) (down 2.2%); and Collin County (Plano), Texas (down 0.4%). Lowest rental returns in San Francisco, San Jose, Provo, Honolulu, and Washington, D.C., metro areas, along with other western markets Counties with the lowest potential annu- al gross returns for 2023 on three-bedroom rentals are Santa Clara County, California, in the San Jose metro area (3.3%); San Mateo County, California, in the San Francisco met- ro area (3.7%); Utah County, California, in the Provo metro area (3.8%); Honolulu County in the Honolulu, Hawaii, metro area (4.2%); and Loudoun County, Virginia (4.2%). Aside from Santa Clara and Honolulu counties, the lowest potential annual gross rental yields in 2023 among counties with a population of at least 1 million are in Ala- meda County (Oakland), California (4.3%); Fairfax County, Virginia (outside Washing- ton, D.C.) (4.3%); and Montgomery County, Maryland (outside Washington, D.C.) (4.5%). Among the bottom 50 potential rental re- turns for counties analyzed in 2023, 34 are in the West and 14 are in the South. The North- east and the Midwest have just one each. Rents rising faster than wages in two- thirds of counties measured Rental amounts are rising faster than wages in 147 of the 212 counties analyzed (69%), including Los Angeles County, Califor- nia; Cook County (Chicago), Illinois; Harris County (Houston), Texas; San Diego County, California; and Orange County, California (outside Los Angeles). Wages are increasing faster than rents in 65 of the 212 counties analyzed (31%), including Maricopa County (Phoenix), Arizona; Dallas County, Texas; Clark County (Las Vegas), Ne- vada; Tarrant County (Fort Worth), Texas; and Hillsborough County (Tampa), Florida. Rents rising faster than home prices in 91% of the nation Rental amounts are rising faster than home prices in 192 of the 212 counties analyzed (91%). They include Los Angeles County, California; Cook County (Chicago), Illinois; Harris County (Houston), Texas; Maricopa County (Phoenix), Arizona; and San Diego County, California. Home prices are going up faster than rental amounts in just 20 of the counties analyzed (9%), including Nassau County, New York (outside New York City); Collin County (Plano), Texas; Pima County (Tucson), Arizona; St. Lou- is County, Missouri; and Westchester County, New York (outside New York City). Wages rising faster than prices in more than three-quarters of markets Wages are increasing faster than home prices in 169 of the 212 counties analyzed (80%), including Los Angeles County, California; Cook County (Chicago), Illinois; Harris County (Houston), Texas; Maricopa County (Phoenix), Arizona; and San Diego County, California. Home prices are increasing faster than wages in 43 of the counties analyzed (20%). They include Collin County (Plano), Texas; St. Louis County, Missouri; Westchester County, New York (outside New York City); Hartford County, Connecticut; and Macomb County, Michigan (outside Detroit). Best SFR growth markets include Chi- cago, Detroit, and Cleveland The report identified 17 "SFR Growth" counties where wages grew over the past year and potential 2023 annual gross rental yields exceed 10%. The 17 SFR Growth markets include Cook County (Chicago), Illinois; Wayne County (Detroit), Michigan; Cuyahoga County (Cleveland), Ohio; Shelby County (Memphis), Tennessee; and New Haven County, Connecticut.