Larger Apartment Markets Push Down Rent Growth According to Axiometrics Recent Survey

Larger Apartment Markets Push Down Rent Growth According to Axiometrics Recent Survey

DALLAS, TX - Increasing moderation in larger markets pushed national annual effective rent growth down to 3.9% in April 2016, the first time the rate has been below 4.0% since July 2014, according to Axiometrics, the leader in apartment and student housing market intelligence.

Even though the 4.0% streak ended, the apartment market showed signs of strength in April:

Occupancy increased to 95.1%.

The $1,277 average effective rent was $12 higher than March's average.

"Many of the nation's largest apartment markets precipitated the drop," said Jay Denton, Axiometrics' Senior Vice President of Analytics.

Denton mentioned that annual effective rent growth decreased in April:

By 97 to 136 basis points (bps) in the three San Francisco Bay Area metros in April.

By 102 bps in Los Angeles.

By 77 bps in Charlotte.

Also, Denver's April rent growth was the second lowest of this cycle, and New York's fell below 1.0% for the first time since February 2014.

Finally, Houston's 89-bps rent-growth decline in April put that market in negative territory (-0.6%) for the first time since August 2010, as oil and gas industry jobs continued to decline, despite the recent rebound of oil prices past $40 per barrel.

"Our forecast has annual effective rent growth at about 3.8% for 2016," Denton said. "Many metros are still coming down from exceedingly high rent growth figures in 2015, but the national market is still achieving rent growth above the long-term average. And, some large markets did experience increased effective rent growth in April, including Seattle, Dallas and Phoenix."

The national rate was 16 bps lower than March's 4.1% and 115 bps below the 5.1% of April 2015.

On a more positive note, the national occupancy rate increased for the third straight month, rising 14 bps to 95.1% from March's 95.0%. The April rate represents the ninth month of the past 13 in which the national apartment market achieved occupancy of 95.0% or higher - the level at which Axiometrics considers an apartment market full.

April's occupancy rate was essentially the same as that of April 2015.

Sacramento Again King of Rent Growth

Sacramento, with a rate of 11.4% was the only metro among Axiometrics' top 50, based on number of units, to achieve double-digit annual effective rent growth in April. As such, it maintained its No. 1 position among the top 50 for the second straight month.

And why not? The metro added more than 22,000 jobs in the 12 months ending March 2016, increasing apartment demand, and only 665 new units were delivered in 2014 and 2015 combined. Just 255 have been identified to come to market this year, and 341 for 2017 have been identified.

California's capital padded its lead over No. 2 Portland, as the Oregon city's 8.7% rent growth marked the first time since March 2015 that its rate was below 10%.

Seattle and Riverside traded the Nos. 3 and 4 spots.

Fort Worth was the biggest mover, rising from No. 13 to No. 7.

Tampa-St. Petersburg and Orlando were Nos. 8 and 9, jumping from Nos. 10 and 12, respectively.

Source: Axiometrics / #Apartments #Multifamily

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