SOURCE: Axiometrics Inc.

Axiometrics Inc.

February 21, 2013 14:02 ET

Axiometrics Data Shows Apartment Market Remains Steady Through First Month of 2013

Houston Is Top Market and Class C the Top Asset Class in Effective Rent Growth

DALLAS, TX--(Marketwire - February 21, 2013) -  According to Axiometrics Inc., the leading provider of apartment data and market research, the apartment market in January remained steady if not spectacular, with effective rent growth measuring 3.62% nationally, which is in-line with its full-year forecast for 2013 of 3.6%. The occupancy rate was 94.04%. A divergence was noted, however, when comparing by asset class as Class C properties produced an annual growth rate of 6.0% but Class A properties just 3.1%.

"The key question for this year will be how the escalating number of new apartment deliveries impact existing properties," said Jay Denton, vice president of research for Axiometrics. "The spring months will likely provide a clearer answer than the January results because more leases turnover then and may have more impact on pricing. So far, however, we have seen a continuation of last year's generally steady apartment market in terms of effective rent growth."

Axiometrics is tracking approximately 164,000 units across the country scheduled for delivery in 2013, or nearly double the 86,000 delivered in 2012.

Effective Rent Growth and Occupancy
The effective rent growth rate in January of 3.62% was down just slightly from a rate of 3.72% in December. Nineteen of the top 88 metropolitan statistical areas (MSAs) had an annual growth rate higher than 5.0%. Aside from Houston, which led the country with 7.0% growth, other markets of note included San Francisco (6.8%), Nashville (6.3%), and Denver (6.2%). 

Class C properties continued their recent tear during January, averaging 6.0% effective rent growth. Annual effective rent growth for Class A properties has steadily declined in the last year, dropping from 5.1% in January 2012 to 3.2% in January 2013. While Class A and C properties have been on opposite growth paths the past year, Class B properties have been very stable, averaging approximately 3.7% growth since November 2011.

January's occupancy rate remained virtually the same as December's, measuring 94.04% this month versus 94.04% last month. Even though January is typically a slow time of the year, the occupancy rate continues to improve from the comparable months of 2011 and 2012. This is in contrast to effective rent growth, which has been slowly moderating since late-2011 despite continued improvement in the occupancy rate. The accompanying chart illustrates the relative performance of effective rent growth and occupancy since January 2011.

Top and Bottom Performing MSAs
The market-leading numbers generated by Houston during January were driven by strong job growth and a limited amount of new supply. Houston's results could change later this year, especially in the Montrose/River Oaks area of the city, as a lot of new supply is on the way. This one submarket will see nearly 3,800 units delivered this year, with most coming in the second and third quarters. 

Markets of note at each end of the growth spectrum are outlined in the following table:

   Top and Bottom Performing MSAs
Rank*  MSA  Annual Eff Rent Growth  Occupancy Rate  Revenue Growth
Jan-12  Jan-13  Jan-12  Jan-13  Jan-12  Jan-13
1    Houston, TX    5.1%    7.0%    91.7%    93.1%    6.8%    8.7%
2    Palm Bay, FL    2.8%    4.2%    90.8%    94.6%    4.4%    8.5%
3    Cape Coral, FL    4.2%    6.2%    93.0%    95.0%    6.3%    8.4%
4    Boulder, CO    3.0%    8.1%    95.5%    95.4%    2.1%    8.1%
5    Corpus Christi, TX    6.0%    6.7%    94.0%    95.1%    9.1%    7.9%
9    Oakland, CA    7.4%    6.9%    95.8%    96.2%    7.9%    7.3%
10    Nashville, TN    3.2%    6.3%    94.5%    95.4%    3.8%    7.3%
11    Denver, CO    6.2%    6.2%    94.2%    94.8%    6.2%    6.8%
12    Seattle, WA    5.4%    6.1%    94.8%    95.3%    5.4%    6.6%
   National  4.0%  3.1%  93.5%  94.1%  4.4%  4.2%
50    Raleigh, NC    4.5%    3.0%    94.4%    94.7%    4.4%    3.4%
51    Los Angeles, CA    4.6%    3.0%    94.9%    95.2%    5.9%    3.4%
54    Portland, OR    4.4%    2.9%    94.5%    94.8%    3.8%    3.3%
59    Boston, MA    7.5%    3.0%    95.5%    95.3%    7.6%    2.8%
70    Washington, DC    3.5%    1.5%    94.7%    94.8%    2.6%    1.7%
82    Las Vegas, NV    -1.9%    0.2%    91.5%    91.2%    -1.7%    -0.1%
84    Albuquerque, NM    0.8%    -0.6%    93.1%    92.9%    -0.7%    -0.9%
85    Sacramento, CA    2.1%    -0.2%    94.3%    93.7%    2.2%    -0.9%
86    Salinas, CA    2.1%    1.7%    94.2%    91.7%    3.1%    -1.0%
87    Tucson, AZ    2.9%    -1.1%    91.9%    90.8%    3.9%    -2.2%
88    Savannah, GA    -5.0%    -1.7%    94.0%    92.7%    -6.3%    -3.0%
 *Rank is based on the top 88 of the 441 MSAs covered by Axiometrics
 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. 

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