SOURCE: Axiometrics Inc.

Axiometrics Inc.

March 27, 2013 11:12 ET

Axiometrics Reports Effective Rent Growth Slowdown for Apartment Market During First Quarter

DALLAS, TX--(Marketwire - March 27, 2013) -  Axiometrics Inc., the leading provider of apartment data and market research, reports that at the national level annual effective rent growth slowed to 3.4% in the first quarter of 2013. For comparison, annual effective rent growth measured 4.0% in the first quarter of 2012 though it moderated to a 3.6% annual rate by the end of the year. Further, Axiometrics' data indicates that the effective rent growth rate has slowed for seven consecutive quarters as many Metropolitan Statistical Areas (MSAs) are decelerating from very strong growth the previous three years. Peak annual rent growth at the national level during this cycle was 5.32% in July 2011. Despite the overall slowdown, many markets are still experiencing above-average rent growth rates, with 29 of the top 88 MSAs reporting annual effective rent growth of greater than 4.0%.

"The results in the first quarter of 2013 were a continuation of the trends we witnessed the past year-and-a-half," said Ron Johnsey, president for Axiometrics. "Effective rent growth has been very steady at the national level, but it has been slowly declining each quarter since mid-2011."

Occupancy at the national level remained strong, measuring 94.1% in the first quarter of 2013. A year ago the occupancy rate stood at 93.7%. "The improvement in the occupancy rate can mainly be attributed to Class C properties, which began recovering later in the cycle. Class A and B properties had already been occupied at close to 95% for the past two years," Johnsey added.

Currently, 30 of the top 88 MSAs have an average occupancy rate greater than 95.0%. Of note, the top six MSAs for occupancy rate are concentrated in Florida (Naples, Sarasota, Miami) and the New York/New Jersey area (New York, Nassau, Edison).

Fewer Concessions Mean Higher Rents
As the market has tightened over the past few years, it has become increasingly difficult for renters to find rental concessions, at least in most MSAs. At the national level, concessions lowered asking rents 1.91% in the first quarter, which is the equivalent of one week free rent on a 12-month lease. For comparison, Axiometrics reported that concessions lowered asking rents 3.05% a year ago and 4.61% two years ago. The peak for concession values was in December 2009 when asking rents were lowered 7.47% by the use of concessions. 

Top and Bottom Performing MSAs
While the San Francisco Bay Area has cooled off from double-digit rent growth last year, Oakland (7.2%), San Jose (6.1%), and San Francisco (5.4%) still rank in the top 11 MSAs nationally for annual effective rent growth. Other notable MSAs outperforming the national average include: Houston (6.5%), Denver (6.1%), Seattle (5.4%), Nashville (5.3%), and Austin (4.8%).

Out of the top 88 MSAs measured, only Tucson (-1.6%), Albuquerque (-0.7%), and Sacramento (-0.4%) had negative annual effective rent growth. Other MSAs underperforming the national average for annual effective rent growth include: Las Vegas (0.6%), Washington, DC (1.3%), Riverside (1.4%), and Indianapolis (1.7%).

            Occ        
    Annual Eff Rent Growth   Rate   Ann Occ Growth
MSA   Feb-12   Feb-13   Feb-13   Feb-12   Feb-13
Albuquerque, NM   0.6%   -0.7%   92.7%   -2.0%   -0.2%
Atlanta-Sandy Springs-Marietta, GA   3.3%   3.3%   92.3%   0.1%   0.7%
Augusta-Richmond County, GA-SC   -0.3%   2.0%   92.7%   -3.6%   1.5%
Austin-Round Rock, TX   6.5%   4.8%   94.8%   0.1%   0.2%
Baltimore-Towson, MD   2.9%   2.0%   94.5%   0.2%   -0.3%
Bethesda-Frederick-Gaithersburg, MD   1.2%   2.0%   95.0%   -0.2%   -0.1%
Birmingham-Hoover, AL   3.0%   3.2%   93.9%   -0.3%   1.7%
Boston-Cambridge-Quincy, MA-NH   7.4%   2.8%   95.4%   -0.3%   -0.1%
Boulder, CO   3.3%   9.1%   95.7%   -0.7%   -0.2%
Camden, NJ   0.6%   1.5%   93.4%   -0.9%   0.6%
Cape Coral-Fort Myers, FL   4.0%   6.4%   94.8%   1.4%   1.2%
Charleston-North Charleston, SC   4.5%   2.5%   92.1%   1.0%   -0.9%
Charlotte-Gastonia-Concord, NC-SC   7.3%   4.4%   94.7%   1.5%   0.5%
Chattanooga, TN-GA   2.1%   1.7%   93.3%   1.4%   -2.3%
Chicago-Naperville-Joliet, IL   5.2%   3.4%   94.8%   0.0%   0.1%
Cincinnati-Middletown, OH-KY-IN   3.5%   2.5%   94.2%   0.6%   -0.7%
Cleveland-Elyria-Mentor, OH   3.2%   1.9%   94.7%   -0.4%   1.5%
Colorado Springs, CO   2.5%   4.0%   93.9%   -1.8%   0.4%
Columbia, SC   1.3%   2.7%   91.7%   1.3%   0.6%
Columbus, OH   4.3%   4.1%   95.2%   1.2%   0.3%
Corpus Christi, TX   6.8%   6.9%   95.3%   2.5%   0.9%
Dallas-Plano-Irving, TX   5.9%   3.8%   94.4%   1.0%   0.4%
Denver-Aurora, CO   6.7%   6.1%   94.9%   -0.1%   0.5%
Detroit-Livonia-Dearborn, MI   6.8%   2.1%   93.3%   2.5%   -0.3%
Durham, NC   3.7%   2.3%   94.6%   0.6%   0.1%
Edison, NJ   3.2%   4.5%   96.5%   0.0%   0.2%
Fort Lauderdale-Pompano Beach-Deerfield Beach, FL   2.5%   3.7%   94.5%   0.1%   0.5%
Fort Worth-Arlington, TX   4.7%   3.7%   94.1%   0.7%   0.7%
Greensboro-High Point, NC   -0.9%   0.3%   92.3%   -1.1%   0.3%
Greenville, SC   3.9%   4.7%   94.4%   1.9%   -0.1%
Hartford-West Hartford-East Hartford, CT   4.0%   0.8%   95.6%   0.4%   -0.6%
Houston-Baytown-Sugar Land, TX   5.1%   6.5%   93.3%   1.8%   1.1%
Indianapolis, IN   3.7%   1.7%   93.1%   0.4%   -0.3%
Jackson, MS   1.9%   2.2%   94.8%   1.7%   0.0%
Jacksonville, FL   0.5%   4.3%   92.6%   -0.5%   1.6%
Kansas City, MO-KS   4.3%   3.5%   94.3%   1.1%   0.0%
Lake County-Kenosha County, IL-WI   2.7%   4.9%   95.4%   1.0%   1.3%
Lansing-East Lansing, MI   3.5%   5.7%   96.1%   0.1%   -0.1%
Las Vegas-Paradise, NV   -1.4%   0.6%   91.2%   0.3%   -0.6%
Lexington-Fayette, KY   4.8%   0.5%   92.8%   0.7%   -0.7%
Little Rock-North Little Rock, AR   0.3%   0.5%   91.0%   -0.4%   -0.7%
Los Angeles-Long Beach-Glendale, CA   4.8%   3.0%   95.3%   0.9%   0.3%
Louisville, KY-IN   3.2%   6.6%   95.3%   0.3%   0.1%
Memphis, TN-MS-AR   1.9%   0.8%   92.2%   0.3%   -0.3%
Miami-Miami Beach-Kendall, FL   4.7%   3.9%   96.3%   0.5%   0.4%
Minneapolis-Saint Paul-Bloomington, MN-WI   4.1%   3.0%   96.0%   -0.7%   0.2%
Mobile, AL   -0.3%   0.4%   90.3%   -3.4%   -0.1%
Montgomery, AL   1.2%   2.0%   91.4%   3.3%   0.2%
Naples-Marco Island, FL   6.9%   3.6%   97.7%   2.9%   0.3%
Nashville-Davidson--Murfreesboro, TN   4.0%   5.3%   95.3%   0.7%   0.5%
Nassau-Suffolk, NY   1.2%   3.9%   97.1%   0.4%   0.8%
New York-Wayne-White Plains, NY-NJ   3.8%   4.2%   96.6%   0.1%   0.2%
Oakland-Fremont-Hayward, CA   7.1%   7.2%   96.1%   0.2%   0.4%
Oklahoma City, OK   3.6%   4.3%   94.1%   0.2%   -0.3%
Orlando, FL   3.8%   3.4%   94.2%   0.8%   0.7%
Oxnard-Thousand Oaks-Ventura, CA   3.0%   0.7%   95.3%   0.4%   -0.1%
Palm Bay-Melbourne-Titusville, FL   2.4%   4.6%   94.7%   1.7%   3.4%
Philadelphia, PA   3.5%   2.2%   94.5%   0.3%   0.0%
Phoenix-Mesa-Scottsdale, AZ   1.4%   3.4%   93.2%   0.2%   0.5%
Portland-Vancouver-Beaverton, OR-WA   4.0%   3.4%   95.0%   -0.5%   0.2%
Providence-New Bedford-Fall River, RI-MA   5.3%   2.1%   95.0%   -0.7%   -0.2%
Raleigh-Cary, NC   4.6%   3.0%   94.7%   0.0%   0.1%
Reno-Sparks, NV   -1.4%   4.3%   95.4%   -0.3%   0.2%
Richmond, VA   3.0%   2.1%   93.2%   1.1%   -0.5%
Riverside-San Bernardino-Ontario, CA   1.8%   1.4%   94.6%   -0.2%   0.7%
Sacramento--Arden-Arcade--Roseville, CA   2.4%   -0.4%   93.9%   -0.3%   -0.6%
Saint Louis, MO-IL   1.5%   3.6%   93.3%   0.4%   -0.3%
Salinas, CA   1.7%   1.8%   92.2%   0.6%   -2.1%
Salt Lake City, UT   3.9%   5.4%   95.5%   1.5%   -0.3%
San Antonio, TX   4.0%   4.1%   94.3%   0.5%   0.3%
San Diego-Carlsbad-San Marcos, CA   1.4%   3.6%   95.3%   -0.7%   0.6%
San Francisco-San Mateo-Redwood City, CA   14.7%   5.4%   95.0%   -0.1%   -1.3%
San Jose-Sunnyvale-Santa Clara, CA   10.6%   6.1%   96.0%   -0.3%   -0.5%
Santa Ana-Anaheim-Irvine, CA   5.1%   3.4%   95.2%   -0.1%   0.1%
Sarasota-Bradenton-Venice, FL   4.6%   5.9%   96.4%   1.4%   0.0%
Savannah, GA   -2.6%   0.7%   92.8%   -0.7%   -1.5%
Seattle-Bellevue-Everett, WA   5.9%   5.4%   95.4%   0.0%   0.2%
Spartanburg, SC   6.1%   2.3%   93.4%   2.1%   1.5%
Tacoma, WA   0.0%   1.4%   94.7%   -0.3%   0.9%
Tampa-Saint Petersburg-Clearwater, FL   3.0%   3.6%   93.6%   0.2%   0.4%
Tucson, AZ   2.3%   -1.6%   91.2%   0.9%   -0.8%
Tulsa, OK   3.1%   2.2%   91.7%   0.6%   0.3%
Virginia Beach-Norfolk-Newport News, VA-NC   -0.1%   0.3%   92.8%   -1.1%   -0.2%
Warren-Farmington Hills-Troy, MI   7.3%   4.7%   95.1%   0.0%   1.1%
Washington-Arlington-Alexandria, DC-VA-MD-WV   3.2%   1.3%   94.8%   -0.7%   0.0%
West Palm Beach-Boca Raton-Boynton Beach, FL   2.0%   5.0%   94.7%   0.5%   0.9%
Wilmington, DE-MD-NJ   4.9%   1.6%   93.7%   0.3%   0.4%
Winston-Salem, NC   2.2%   0.1%   92.1%   1.4%   -0.6%
National   4.0%   3.5%   94.1%   0.3%   0.3%
                     
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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