DALLAS, TX--(Marketwired - December 19, 2014) - Though annual effective rent growth in the Bay Area apartment market continued strong in November, new supply, combined with seasonal slow-down, is beginning to erode occupancy.
According to research from Axiometrics, the leader in apartment market research and analysis, the three Bay Area metro areas experienced month-over-month drops in occupancy as a total of 4,762 new units were delivered throughout the three Metropolitan Statistical Areas (MSA) so far in 2014, with an additional 1,702 units anticipated by the end of the year.
Occupancy in the Oakland-Fremont-Hayward Metropolitan Division was 96.5% in November, a decrease from the 96.8% reported in October and slightly higher than the 96.3% from November 2013. Occupancy in the San Francisco-San Mateo-Redwood City Metropolitan District was 96.5%, down 10 basis points from the 96.6% reported in October. The November figure was, however, higher than the 96.0% of November 2013.
The San Jose-Sunnyvale-Santa Clara MSA showed occupancy at 96.2%, also a 10-basis-point drop from the 96.3% from the month before, and a 40-basis point increase from the 95.8% of November 2013.
Annual effective rent growth in the San Jose and Oakland metros continued in double digits at 11.3% and 13.0%, respectively -- the two strongest metros among Axiometrics' top 50 -- while No. 4 San Francisco clocked in at 9.2%. On average, residents in the San Francisco division paid $2,931.30 for an apartment, while to the south, average effective rent was $2,509.40 in San Jose. Meanwhile average rent in Oakland, across the bay, remained the lowest at $2,061.30.
"There's little doubt that the Bay Area apartment markets are still strong, and that's not anticipated to change," said Stephanie McCleskey, Axiometrics Vice President of Research. "But with the new supply delivered in 2014, and a rash of new units anticipated for delivery next year, we could see occupancy and rent growth erode somewhat over the next 12-18 months, particularly in San Jose, where deliveries will increase by 80% from this year."
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
