SOURCE: Axiometrics Inc.

Axiometrics Inc.

November 22, 2013 10:30 ET

Axiometrics Research Shows Typical Seasonal Slowdown for Apartment Market in October

Delivery Pipeline Ramps Up for 2014

DALLAS, TX--(Marketwired - November 22, 2013) - Axiometrics Inc., the leading provider of apartment data and research, reported today that the apartment market in October demonstrated typical seasonal slowing in effective rent growth and occupancy. For the month, annual effective rent growth measured 2.99%, while occupancy declined slightly to 94.70%. 

Separately, Axiometrics noted that identified deliveries for 2014 now measure approximately 230,000 units nationwide, exceeding the total for 2013 by nearly two times.

"Thus far we are not seeing any macro-level indicators signaling a larger-than-normal seasonal decline this fourth quarter," said Ron Johnsey, president of Axiometrics. "Rent and occupancy growth this October was similar to what we reported for 2010, 2011, and 2012. Likewise, lease-up properties are absorbing well and offering very little in concessions, even though new supply continues to increase."

Effective Rent Growth and Occupancy
At the national level, sequential effective rent growth was almost identical to the same period of 2012, with effective rents declining by -0.30% between September and October to 2.99%. In 2008, Axiometrics reported a more substantial decline of -0.64% in October, but this year effective rents are trending closer to the mild declines for the fourth quarters of 2010, 2011, and 2012. 

Even with the seasonal slowdown, seventeen of the top 88 metropolitan statistical areas (MSAs) reported annual effective rent growth of greater than 5.00% in October. Two late recovering Florida markets, Naples and Cape Coral, ranked as top performers with effective rent growth of 11.30% and 8.38%, respectively. Other notable MSAs with annual growth rates greater than 5.00% in October included: Boulder (9.43%), Oakland (8.44%), San Francisco (8.18%), and Seattle (6.49%). 

At the bottom of the rankings, Washington, DC reported an annual growth rate of -1.00%, while Philadelphia had its second consecutive month of negative annual growth (-0.70%).

Nationally, the occupancy rate decreased to 94.7% in October after reaching Axiometrics' forecasted rate for the end of 2013 for the last several months. The occupancy declined 21 basis points from September, but it is still up 14 basis points from October of last year. Also, the national occupancy rate remains near its high for the past 12 years.

Currently, 44 of the top 88 MSAs have an average occupancy rate greater than 95.0%.

The following table lists some of the top and bottom performing MSAs across the country. The California and the Pacific Northwest MSAs remain top performers. Seattle, despite the delivery of 3,546 units in the second half of 2013 (which is 36% more than the first half of 2013) has also continued to outperform the nation. Washington, DC continues to rank near the bottom for both annual effective rent growth and revenue growth, and showed negative rent growth for the fifth consecutive month.

 
Top and Bottom Performing MSAs
Rank*  MSA  Annual Effective Rent Growth  Occupancy Rate  Revenue Growth
Oct-12  Oct-13  Oct-12  Oct-13  Oct-12  Oct-13
  1     Naples, FL     8.0%     11.3%     95.9%     96.9%     9.0%     12.2%
  3     Corpus Christi, TX     7.8%     9.4%     96.1%     96.0%     10.2%     8.9%
  4     Boulder, CO     6.4%     9.4%     94.1%     95.8%     5.1%     9.6%
  6     Oakland, CA     7.6%     8.4%     96.7%     96.3%     8.3%     7.9%
  8     San Francisco, CA     8.2%     8.2%     95.7%     96.0%     7.2%     8.6%
  9     Portland, OR     3.4%     7.9%     95.0%     96.0%     3.3%     8.8%
  10     Denver, CO     6.7%     7.1%     95.4%     95.7%     7.2%     7.4%
  11     Seattle, WA     6.0%     6.5%     95.1%     95.3%     6.6%     6.9%
  12     San Jose, CA     7.1%     6.3%     95.7%     95.8%     6.7%     6.4%
      National     3.6%     3.0%     94.5%     94.7%     4.1%     3.1%
  64     Chicago, IL     3.8%     1.6%     94.9%     94.9%     3.7%     1.6%
  76     New York, NY     2.8%     0.9%     96.6%     96.7%     2.5%     1.0%
  82     Philadelphia, PA     2.1%     -0.7%     95.3%     94.1%     2.2%     -1.8%
  84     Washington, DC     1.6%     -1.0%     95.4%     94.9%     1.9%     -1.5%
  *Rank is based on annual revenue growth in October 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.
                      
                             

Pipeline Delivery Schedule Ramps up for 2014 and 2015
Axiometrics also reported that deliveries scheduled for 2014 and 2015 have continued to increase as more units started construction in 2013. In 2014, deliveries will be nearly two times the level they were in 2013 and nearly three times the level of 2012.

"While at a national level we have begun to see construction starts leveling out or even slowing, we have yet to see a peak in deliveries," added Johnsey. "As 2013 progressed, more properties advanced from the planning to construction stage, thus over the past six months our identified delivery count for 2014 has increased from 133,000 to approximately 230,000."

Out of the 230,000 units to deliver in 2014 most will be in just 20 markets, Axiometrics noted. The bottom 67 markets will have just 200 units or fewer delivering in 2014. Out of the top 10 MSAs for scheduled deliveries in 2014, the following had the largest increases in units added to planned 2014 deliveries from the second to third quarter of 2013: Houston (117.8%), Dallas (93.3%), New York (82.1%), and Seattle (81.4%). 

 
2014 Deliveries
MSA  1Q14  2Q14  3Q14  4Q14  2014 Total
Washington, DC  4,383  3,866  4,636  2,625  15,510
Houston, TX  4,414  4,231  3,157  3,091  14,893
New York, NY  3,306  2,742  2,093  3,604  11,745
Dallas, TX  2,705  2,812  3,459  2,748  11,724
Austin, TX  3,132  2,305  2,704  1,220  9,361
Seattle, WA  2,466  2,315  2,127  2,164  9,072
Los Angeles, CA  2,621  2,366  2,051  1,752  8,790
Denver, CO  1,871  2,503  2,414  1,330  8,118
Boston, MA  1,351  1,309  1,355  1,617  5,632
Atlanta, GA  1,138  1,794  1,345  1,318  5,595
Raleigh, NC  2,342  1,501  747  667  5,257
Charlotte, NC  2,114  1,050  1,062  762  4,988
Minneapolis, MN  720  1,103  1,495  1,374  4,692
Nashville, TN  1,364  1,169  1,034  876  4,443
San Jose, CA  1,146  1,250  1,113  841  4,350
Phoenix, AZ  1,549  1,123  877  704  4,253
Chicago, IL  774  1,080  1,497  833  4,184
San Francisco, CA  944  1,040  1,266  805  4,055
Bethesda, MD  985  1,210  824  796  3,815
Orlando, FL  1,218  1,571  582  346  3,717
TOP 20 TOTALS  40,543  38,340  35,838  29,473  144,194
Source: Axiometrics
 
 

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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