SOURCE: Axiometrics Inc.

Axiometrics Inc.

August 20, 2013 11:15 ET

After Uptick in May and June, Effective Rent Growth Moderates Again in July

DALLAS, TX--(Marketwired - August 20, 2013) -   Axiometrics Inc., the leading provider of apartment data and research, reports that national effective rent growth, which had increased in May and June after a slowdown in April, once again moderated in July to a rate of 3.41%. The occupancy rate held steady at 94.8%.

"All classes of apartments (A, B, and C) showed signs of moderation for the month as compared to June results," said Jay Denton, vice president of research for Axiometrics. "However, only Class A properties decreased in annual effective rent growth as compared to July of 2012, slowing from growth of 4.12% last year to 3.20% this July. Interestingly, occupancy is up 37 basis points (bps) since July 2012."

Effective Rent Growth and Occupancy
Nationally, annual effective rent growth moderated from 3.51% in June to 3.41% in July. In July of 2012 the annual growth rate was 3.75%, and has slowed in nine of the last 12 months as many metropolitan statistical areas (MSAs) have been moderating from very strong rent growth the previous three years. The peak annual growth rate nationally was 5.32% in June 2011.

Seventeen of the top 88 MSAs reported annual growth greater than 5.0% in July. Fort Myers ranked first with an annual growth rate of 11.03% followed by Oakland at 10.2%. Selected other MSAs with annual effective rent growth above 5.0% in July included: Boulder (9.01%), San Francisco (8.05%), Corpus Christi (8.03%), Denver (7.58%), and Seattle (6.88%). 

Washington, DC continued to rank as one of the lowest performing MSAs with an annual effective rent growth rate of -0.20%. Other markets with negative annual effective rent growth included: Albuquerque (-0.22%), Chattanooga (-0.30%), Montgomery (-1.31%), and the lowest ranked market, Augusta, at (-1.34%).

The national occupancy rate has held steady at 94.8% for the past three months, outperforming Axiometrics' previously forecasted rate for the second quarter of 2013 of 94.7%. Despite no sequential growth in the occupancy rate from June to July, the rate is 37 bps higher than in July 2012 and 71 bps higher than in July 2011.

The occupancy rate was steady at 94.8% during May and June, just slightly above Axiometrics' forecasted rate of 94.7%. Though there was no sequential growth in the occupancy rate between May and June, the rate for June was 0.41% higher than in June 2012, and 0.70% higher than in June 2011. Axiometrics, which forecasts occupancy to top out at 94.9% by the end of 2013, also reported that currently 44 of the top 88 MSAs have an average occupancy rate greater than 95.0%.

Comparing specific regions, several Florida markets ranked in the top tier for revenue growth this month. Axiometrics also reports that California and the Pacific Northwest continue to perform well. The following table lists many of the top and bottom performing markets in Axiometrics' survey for July:

 
Top and Bottom Performing MSAs
Rank*  MSA  Annual Effective Rent Growth Occupancy Rate Revenue Growth
Jul-12  Jul-13  Jul-12  Jul-13  Jul-12  Jul-13
 1  Fort Meyers, FL  1.9%  11.0%  93.5%  93.7%  4.1%  11.2%
 2  Oakland, CA  6.2%  10.2%  96.4%  96.7%  6.1%  10.5%
 3  Naples, FL  6.9%  9.8%  96.3%  96.8%  10.7%  10.3%
 4  Sarasota, FL  5.3%  7.6%  95.2%  96.3%  6.0%  8.9%
 6  San Francisco, CA  11.3%  8.0%  95.4%  95.9%  9.4%  8.5%
 9  Denver, CO  7.0%  7.6%  95.2%  95.8%  7.3%  8.2%
 11  Portland, OR  4.0%  6.7%  95.4%  96.6%  3.8%  7.9%
 12  Seattle, WA  6.1%  6.9%  95.4%  95.9%  6.1%  7.4%
 13  Houston, TX  6.5%  6.0%  93.4%  94.4%  8.3%  6.8%
    National  3.7%  3.4%  94.4%  94.7%  4.0%  3.7%
 63  Oklahoma City, OK  5.0%  2.6%  94.9%  94.9%  5.7%  2.5%
 71  Baltimore, MD  2.9%  1.8%  95.3%  95.1%  2.4%  1.5%
 74  Sacramento, CA  1.3%  1.2%  94.0%  94.6%  0.9%  1.4%
 88  Washington, DC  3.2%  -0.2%  95.5%  95.2%  2.9%  -0.7%
 
*Rank is based on annual revenue growth in July 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.
 

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