SOURCE: Axiometrics Inc.

Axiometrics Inc.

January 23, 2015 10:35 ET

Bay Area Completes Year With Double-Digit Rent Growth

DALLAS, TX--(Marketwired - January 23, 2015) - All three Northern California Bay Area metro areas finished 2014 with double-digit apartment rent growth. According to Axiometrics, the leader in apartment market research and analysis, the Oakland-Freemont-Hayward Metropolitan Division reported 13.9% annual effective rent growth in December, while across the bay, the San Francisco-San Mateo-Redwood City Metropolitan Division had an annual effective rent growth of 11.6%.

Farther south, the San Jose-Sunnyvale-Santa Clara Metropolitan Statistical Area reported an annual effective rent growth of 10.4%; the average monthly rent per unit was $2,496.40 per month. Residents in Oakland paid, on average, $2,072.10 for an apartment, while those in San Francisco shelled out $2,938.40.

"These statistics really aren't too surprising," said Stephanie McCleskey, Axiometrics Vice President of Research. "Job growth in the Bay Area continues to be remarkably strong, and it makes sense that demand for rental housing continues."

Occupancy in San Jose and Oakland dropped month over month; San Jose's occupancy of 95.7% was 50 basis points (bps) less than the 96.2% reported in November 2014, but 30 bps higher than the 95.4% of December 2013. Meanwhile, in Oakland, the December 96.3% occupancy was slightly down from the 96.5% of November, but 40 bps higher than the 95.9% reported at the same time the year before.

San Francisco's occupancy was 20 bps higher month over month. In December, the City by the Bay had occupancy of 96.7%, up from the 96.5% in November and higher than the 95.5% reported in December 2013.

In addition to normal seasonality, "much of the drop in occupancy, where there was a drop, has been due to new supply coming to the market," McCleskey said. "In 2015, we'll likely see rent growth and occupancy moderate because of the new supply."

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