DALLAS, TX--(Marketwired - June 20, 2013) - Axiometrics Inc., the leading provider of apartment data and research, reports that national effective rent growth reversed its recent slowdown in May, inching up to an annual growth rate of 3.34%. This increase in effective rent growth took place despite 73,629 new units being delivered into the market across the country this year. In addition, occupancy continued to tighten in most markets, increasing by 35 basis points from its level a year ago to an average rate of 94.70%.
"Although annual effective rent growth increased from April to May, it has still slowed in nine of the previous ten months as many metropolitan statistical areas (MSAs) are moderating from very strong growth the previous three years," said Jay Denton, vice president of research for Axiometrics. "Class C properties continue to demonstrate the strongest effective rent growth this year, though there are a few MSAs where Class A properties continue to increase rents at above average rates, such as Miami and New York."
Effective Rent Growth and Occupancy
Nationally, annual effective rent growth increased from 3.18% in April to 3.34% in May. This compares to Axiometrics' reported rate of 4.10% in May 2012. Thirteen of the top 88 MSAs had an average annual growth rate greater than 5.0% in May, including Oakland (10.1%), Corpus Christi (8.9%), San Jose (7.4%), Houston (6.0%), and Seattle (5.8%). Previous highflier Washington, D.C. was in the bottom 10 MSAs with a 0.4% annual growth rate. Seven MSAs recorded a negative annual rate of growth, including Albuquerque (-0.9%) and Tucson (-0.5%).
At the national level, Class C properties continued to post the highest annual effective rent and occupancy growth rates in May, with rent growth measuring 4.09%. Class A properties, which posted annual effective rent growth of 4.63% as recently as May 2012, reached just 2.82% growth this May. Class B properties were roughly in the middle with a growth rate of 3.40%.
The occupancy rate increased 17 basis points from 94.53% in April to 94.70% in May. This rate is nearly three-quarters-of-a-point higher than it was in May 2011. Currently, 45 of the top 88 MSAs that Axiometrics tracks have an average occupancy rate greater than 95.0%. In addition, Axiometrics' latest forecast projects the national average occupancy rate to top 95.0% in the third quarter and to average 94.7% for the full year.
The following table lists a selection of the top and bottom performing MSAs across the country:
| Top and Bottom Performing MSAs | ||||||||||||
| Rank* | MSA | Annual Effective Rent Growth | Occupancy Rate | Revenue Growth | ||||||||
| May-12 | May-13 | May-12 | May-13 | May-12 | May-13 | |||||||
| 1 | Oakland, CA | 5.9% | 10.1% | 95.8% | 96.4% | 5.3% | 9.8% | |||||
| 2 | Boulder, CO | 5.3% | 10.0% | 95.3% | 95.7% | 4.6% | 8.9% | |||||
| 3 | Corpus Christi, TX | 5.5% | 8.9% | 95.4% | 95.6% | 7.2% | 8.5% | |||||
| 5 | Cape Coral, FL | 4.0% | 8.4% | 94.2% | 94.7% | 5.7% | 8.3% | |||||
| 6 | San Jose, CA | 8.3% | 7.4% | 96.6% | 96.4% | 6.8% | 6.8% | |||||
| 7 | San Francisco, CA | 14.9% | 7.3% | 96.2% | 95.9% | 12.8% | 6.7% | |||||
| 8 | Denver, CO | 7.2% | 6.9% | 95.1% | 95.6% | 6.6% | 7.0% | |||||
| 10 | Houston, TX | 6.1% | 6.0% | 93.1% | 94.4% | 7.5% | 6.9% | |||||
| 11 | Seattle, WA | 5.3% | 5.8% | 95.4% | 96.0% | 4.8% | 6.0% | |||||
| 12 | Naples, FL | 6.8% | 5.6% | 97.6% | 97.7% | 9.3% | 5.4% | |||||
| 16 | Austin, TX | 6.5% | 4.4% | 95.1% | 95.3% | 6.1% | 4.4% | |||||
| National | 4.1% | 3.3% | 94.3% | 94.8% | 4.1% | 3.6% | ||||||
| 62 | Baltimore, MD | 3.1% | 1.9% | 95.2% | 95.0% | 2.7% | 1.6% | |||||
| 67 | Riverside, CA | 2.0% | 1.6% | 94.3% | 94.6% | 1.7% | 1.8% | |||||
| 74 | Philadelphia, PA | 3.0% | 1.2% | 95.1% | 94.9% | 2.6% | 1.4% | |||||
| 75 | Las Vegas, NV | -1.0% | 1.0% | 91.9% | 92.4% | -1.0% | 1.5% | |||||
| 76 | Bethesda, MD | 1.6% | 1.0% | 95.4% | 95.7% | 1.0% | 1.2% | |||||
| 79 | Washington, D.C. | 3.1% | 0.4% | 95.4% | 95.1% | 2.7% | 0.0% | |||||
| *Rank is based on annual revenue growth in May 2013. Only the top 88 MSAs were used for the ranking. Axio tracks properties in more than 400 MSAs around the country. | ||||||||||||
| Source: Axiometrics Inc. | ||||||||||||
Effective Rent by Market and Class Level
In its most recent monthly data Axiometrics also noted some interesting comparisons by market and class level. For example, the national average for Class A effective rent is $1,479 per month. San Francisco's average for Class C units is $354 higher
than that at $1,833 per month. In addition, as outlined in the table below, the average rent for Class C properties in San Francisco exceeds the rent for Class A properties in several major markets and nearly matches the level for Class A in Chicago.
| May 2013 | Effective Rent Level | |||
| MSA | Class A | Class B | Class C | |
| San Francisco, CA | $3,574 | $2,583 | $1,833 | |
| Los Angeles, CA | $2,588 | $1,655 | $1,097 | |
| Washington, D.C. | $2,367 | $1,517 | $1,060 | |
| Miami, FL | $1,989 | $1,270 | $877 | |
| Chicago, IL | $1,967 | $1,181 | $847 | |
| Seattle, WA | $1,802 | $1,285 | $958 | |
| Houston, TX | $1,482 | $871 | $585 | |
| Austin, TX | $1,377 | $936 | $729 | |
| Dallas, TX | $1,339 | $882 | $614 | |
| Atlanta, GA | $1,189 | $826 | $597 | |
| National | $1,479 | $1,033 | $760 | |
| Source: Axiometrics Inc. | ||||
About Axiometrics
Axiometrics is the only multifamily research provider to survey every property in its database at the floor plan level every month. Every property. Every month. Only Axiometrics. Learn more at www.axiometrics.com or by calling 214-953-2242.
Contact Information:
Contact:
Ross Coulter
214-394-5538
ross@mpdventures.com