DALLAS, TX--(Marketwired - September 14, 2016) - Seasonal trends, along with the continued moderation of the apartment market, were reflected in the August 2016 performance picture, according to Axiometrics, the leader in apartment and student housing market research and analysis.
August annual effective rent growth of 2.9% was the first time the rate fell below 3% since February 2014. Rent growth still remains above the 1996-2015 average of 2.2%. Meanwhile, occupancy increased to 95.2% in August.
"Historically, rent growth has decreased and occupancy has increased in August," said Jay Denton, senior vice president of analytics for Axiometrics. "With school starting, more people are settled in their residences and fewer people move. The reduced demand has property owners and managers holding off on rent hikes."
Also, Denton added, "Residents who sign leases in August often don't move in until September or October, and owners tend to be less aggressive about rents during this time so they don't miss opportunities to fill units."
The recent trend of rent-growth decline was demonstrated by the almost across-the-board decreases from July figures in individual metros. Some 38 of Axiometrics' top 50 markets, based on number of units, recorded lower rent growth, as did 75 out of Axiometrics' top 120.
| Aug. 2016 | July 2016 | Aug. 2015 | |||||
| National | |||||||
| Average Rent | $1,293 | $1,292 | $1,257 | ||||
| Annual Effective Rent Growth | 2.9% | 3.2% | 5.1% | ||||
| Occupancy | 95.2% | 95.1% | 95.4% | ||||
Source: Axiometrics
Occupancy remains a bright spot, with the rate above 95.0% -- the rate at which Axiometrics considers a property or market full -- for the sixth straight month and the 13th month of the past 17.
See accompanying rolling three-year charts for rent growth and occupancy nationwide.
Rent Growth Drops in Most Metros
Axio top 50 markets that saw decreased rent growth month-over-month also declined year-over-year, but markets with higher month-to-month growth were split between increased and decreased year-over-year rates, as shown in the table below:
| Decreased Annual Rent Growth Month-Over-Month and Year-Over-Year | |||||
|
Atlanta Austin Baltimore Birmingham Boston Charleston, SC Chicago Columbus, OH Dallas Denver |
Fort Worth Houston Jacksonville Las Vegas Los Angeles Miami Nashville New York Oakland Orlando Oklahoma City |
Phoenix Portland, OR San Antonio San Diego San Francisco San Jose Seattle Silver Spring Tampa-St. Petersburg West Palm Beach |
|||
| Increased Annual Rent Growth Month-Over-Month and Year-Over-Year | |||||
|
Charlotte Indianapolis |
Memphis Riverside |
Warren, MI Washington, DC |
|||
| Decreased Annual Month-Over-Month and Increased Year-Over-Year | |||||
|
Kansas City Minneapolis-St. Paul |
Richmond Sacramento |
Virginia Beach | |||
| Increased Annual Month-Over-Month and Decreased Year-Over-Year | |||||
|
Charlotte Fort Lauderdale |
Hartford Long Island Raleigh |
Philadelphia St. Louis |
|||
Except for Sacramento and Riverside -- which recorded the two highest rent-growth rates among top 50 metros in August -- the markets in the bottom three categories were primarily in the Midwest, Southeast and Northeast. The Northeast markets, not including DC, experienced increased rent growth after several months of decline.
Note San Francisco and Houston as markets that have decreased annual rates. Houston recorded its fifth straight month with negative rent growth, falling to -2.9% in August. The oversupplied, urban-core Montrose/River Oaks submarket was the primary culprit with -8.0% effective rent growth.
San Francisco fell to -1.7% rent growth in August, and was joined in negative territory by San Jose, at -1.6%. Oakland was still above water at 1.4%, its lowest rate since April 2010.
Top 3 Metros Remain the Same
Sacramento marked six straight months as the market with the highest annual effective rent growth among the Axiometrics top 50, with Riverside and Seattle remaining at Nos. 2 and 3 for the second straight month.
Atlanta had the strongest upward move, climbing two spots to No. 8, while Charleston recorded the biggest drop, four places to No. 17.
All the metros in the list below held over from July's list. Just short of the mark are surprising Indianapolis and Memphis, which had the two highest year-over-year rent-growth increases among the top 50 -- 329 bps and 255 bps, respectively.
|
Annual Effective Rent Growth |
Occupancy Rate | Revenue Growth | ||||||||||
| Rank | MSA | Aug-15 | Aug-16 | Aug-15 | Aug-16 | Aug-15 | Aug-16 | |||||
| 1 | Sacramento, CA | 9.9% | 11.6% | 96.1% | 96.6% | 10.1% | 12.1% | |||||
| 2 | Riverside, CA | 7.3% | 8.3% | 95.1% | 95.6% | 7.3% | 8.8% | |||||
| 3 | Seattle, WA | 7.8% | 6.6% | 95.9% | 95.5% | 8.0% | 6.2% | |||||
| 4 | Salt Lake City, UT | 4.8% | 6.4% | 96.3% | 96.5% | 5.3% | 6.5% | |||||
| 5 | Phoenix, AZ | 7.5% | 6.3% | 94.8% | 94.6% | 8.3% | 6.1% | |||||
| 6 | Tampa, FL | 6.2% | 5.8% | 95.8% | 95.4% | 6.7% | 5.5% | |||||
| 7 | Las Vegas, NV | 6.7% | 5.6% | 94.1% | 94.4% | 7.0% | 5.8% | |||||
| 8 | Atlanta, GA | 6.9% | 5.5% | 94.9% | 94.9% | 7.3% | 5.5% | |||||
| 9 | Fort Worth, TX | 6.6% | 5.5% | 95.8% | 95.6% | 7.4% | 5.3% | |||||
| 10 | Nashville, TN | 7.0% | 5.4% | 96.4% | 96.3% | 7.1% | 5.2% | |||||
| 11 | San Diego, CA | 7.8% | 5.3% | 95.7% | 96.3% | 7.2% | 5.9% | |||||
| 12 | Anaheim, CA | 4.4% | 5.0% | 96.2% | 96.1% | 4.0% | 5.0% | |||||
| 13 | Orlando, FL | 7.7% | 4.7% | 96.3% | 95.9% | 8.5% | 4.3% | |||||
| 14 | Dallas, TX | 6.2% | 4.7% | 95.7% | 95.6% | 6.9% | 4.5% | |||||
| 15 | Warren, MI | 3.4% | 4.6% | 96.5% | 97.2% | 3.5% | 5.4% | |||||
| 16 | Charlotte, NC | 6.1% | 4.5% | 95.8% | 95.9% | 6.6% | 4.6% | |||||
| 17 | Charleston, SC | 5.8% | 4.4% | 95.7% | 95.6% | 6.0% | 4.3% | |||||
| National | 5.1% | 2.9% | 95.4% | 95.2% | 5.3% | 2.6% | ||||||
| Selected Other Markets | ||||||||||||
| 1 | Reno, NV | 6.6% | 15.8% | 96.8% | 97.4% | 6.5% | 16.4% | |||||
| 3 | Colorado Springs, CO | 3.5% | 10.6% | 95.5% | 95.7% | 3.1% | 10.8% | |||||
| 4 | Salinas, CA | 9.7% | 10.3% | 97.8% | 97.4% | 9.6% | 10.0% | |||||
| 5 | Tacoma, WA | 7.7% | 9.0% | 95.9% | 96.4% | 9.0% | 9.5% | |||||
| 7 | Palm Bay, FL | 10.3% | 8.0% | 96.1% | 96.2% | 11.3% | 8.1% | |||||
| *Rank is based on annual effective rent growth in August 2016 for Axiometrics' Top 50 Markets. Selected other markets' rankings are based on Axiometrics' Top 120 Markets. Axio tracks properties in more than 500 MSAs throughout the country. | ||||||||||||
| Source: Axiometrics | ||||||||||||
About Axiometrics
Axiometrics' expertise is monitoring and reporting on the apartment and student housing markets, providing an in-depth view of volatile market trends. Axiometrics' granular data-collection methods and thorough analysis help clients make profitable -- and wise -- decisions.
To learn more visit www.axiometrics.com, follow @Axiometrics or on LinkedIn, or call 214-953-2242.
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Contact Information:
Contact
Ross Coulter
1-214-394-5538
ross@mpdventures.com
