DALLAS, TX--(Marketwired - December 19, 2014) - Annual effective rent growth in the Houston-Sugar Land-Baytown MSA ticked upward in November 2014, ending up at 5.4%, according to Axiometrics, the leader in apartment market research and analysis. The number was 12 basis points (bps) higher than October's figure of 5.1%, though occupancy was slightly down at 94.3%. Occupancy was 94.4% in October.
Among the three classes of properties, Class B assets reported the highest effective rent growth at 6.6%, more than 40 bps higher than the 6.21% reported the month before. The Class B stock also beat out Class A and Class C, which reported 1.4% and 5.8% annual effective rent growth, respectively.
Class B properties were 95.2% occupied; though down from the 95.5% occupancy reported in October, it was higher than the Class A occupancy of 93.9% and Class C's 92.7%.
Seasonality and Supply
Stephanie McCleskey, Axiometrics Vice President of Research, said it shouldn't come as much of a surprise that Class B figures have been surging. The 14,644 new units delivered in 2014 have led to competition among Class A properties, while exerting downward pressure on occupancy. Furthermore, "The Class B apartments are much less expensive than Class A, even with increased rent," McCleskey said.
A unit in a Class A property cost, on average, $1,629.90. Class B units went for an average of $987.40.
"Residents are likely willing to sacrifice super-nice amenities for pretty decent amenities, especially if they can cut their monthly rent almost in half," McCleskey said.
Those renting in Class C buildings paid even less, handing over, on average, $660.10 a month per unit, even as occupancy declined from 92.8% occupancy in October to 92.7% in November. Class A occupancy stayed steady at 93.9%.
McCleskey said she isn't anticipating much more movement in occupancy. "This is the time of year during which things slow down," she said.
About Axiometrics
Axiometrics improves property and portfolio performance for apartment investments. Confident investment decisions begin with reliable, timely information. No one has more accurate, detailed, and up-to-date research on the apartment and student housing markets. Learn more at www.axiometrics.com or by calling 214-953-2242.
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Contact Information:
Contact:
Ross Coulter
214-394-5538
ross@mpdventures.com
