DALLAS--(BUSINESS WIRE)--Effective rents (true rents net of concessions) have increased nationally by 4.65% for the year ending February 2011, further evidence of market strength that could lead this year to one of the largest pricing jumps in more than a decade, according to a report issued by Axiometrics Inc., a provider of data and analysis on the multi-family sector.
Axiometrics also reported that the national occupancy rate increased to an average rate of 93.24% in February.
“2010 was a strong year for rent growth, but the data in these first two months indicate 2011 could be the best year since we started reporting on the apartment market in 1996,” said Ron Johnsey, president of Axiometrics Inc. “The outlook for the remainder of the year looks strong, with job growth increasing and supply still at historical lows. In certain submarkets, growth far surpasses even these strong national averages.”
Axiometrics’ analysis indicated that effective rents increased 0.72% nationally between January and February. The growth in February was better than for every month of 2010, except one. In addition, the year-to-date increase in effective rents of 0.96% was also ahead of last year’s figure of 0.79%.
Top and Bottom Performing Markets – Annual Effective Rent Growth
Northern California remained the hottest region of the country in terms of annual effective rent growth. San Jose (10.51%), Oakland (7.75%), and San Francisco (7.36%) all ranked in the top 12 for annual rent growth. However, Southern California was at the other end of the spectrum, with San Diego (1.73%) and Los Angeles (1.47%) ranking among the bottom performing markets in the country.
Many submarkets demonstrated even stronger growth than the national averages, with more than 60 having annual effective rent growth of at least 10%. Some of the highest performing include south central Austin (19.2%), San Jose/Santa Clara (15.7%), and Portland/Beaverton (13.5%). Notable submarket performance was also recorded in Washington, D.C./Woodley Park/Cleveland Park/Van Ness (13.0%), Chicago/The Loop (13.7%), New York/Hudson Waterfront (12.4%), Nashville/Downtown/West End/Green Hills (11.7%), Phoenix/North Tempe (10.1%), and Denver/Lakewood-South (9.9%).
| Effective Rent Growth: Top 10 Markets | Effective Rent Growth: Bottom 10 Markets | ||||||||||||||
| Market | Rate | Market | Rate | ||||||||||||
| Monthly | Annual | Rank | Monthly | Annual | Rank | ||||||||||
| San Jose, CA | 2.44% | 10.51% | 1 | Augusta, GA | -0.40% | 1.86% | 79 | ||||||||
| Portland OR | 1.58% | 10.43% | 2 | Tucson, AZ | 1.29% | 1.85% | 80 | ||||||||
| Savannah, GA | -0.40% | 9.68% | 3 | San Diego, CA | 0.46% | 1.73% | 81 | ||||||||
| Chattanooga, TN | 0.67% | 9.67% | 4 | Virginia Beach, VA | 0.53% | 1.61% | 82 | ||||||||
| Greenville, SC | 0.08% | 9.35% | 5 | Reno, NV | 0.93% | 1.50% | 83 | ||||||||
| Boulder, CO | -0.59% | 8.46% | 6 | Los Angeles, CA | 0.71% | 1.47% | 84 | ||||||||
| Oakland, CA | 1.05% | 7.75% | 7 | Little Rock, AR | 0.59% | 1.42% | 85 | ||||||||
| Naples, FL | 1.50% | 7.73% | 8 | Cape Coral, FL | 0.25% | 1.35% | 86 | ||||||||
| Greensboro, NC | 0.51% | 7.66% | 9 | Detroit, MI | -0.62% | 1.04% | 87 | ||||||||
| Washington, DC | 0.93% | 7.45% | 10 | Las Vegas, NV | -0.03% | -2.53% | 88 | ||||||||
| National | 0.72% | 4.65% | |||||||||||||
Occupancy Rate
In February, the national occupancy rate increased for the first time in five months. The rate improved 15 basis points from 93.09% in January to 93.24% in February. Occupancy had declined by a total of 55 basis points the previous four months.
In 13 of the top 88 markets, the occupancy rate increased by more than 50 basis points. Interestingly, some of the top markets for occupancy gains were bottom performing markets for rent increases. For example, Detroit and Reno showed strong monthly and annual occupancy increases, but for more than a year their rent growth has been particularly weak.
| Occupancy Rate | ||||||
| Market | Rate | Basis Point Growth | ||||
| Monthly | Annually | |||||
| Detroit, MI | 90.39% | 171 | 275 | |||
| Oklahoma City, OK | 94.35% | 138 | 355 | |||
| Cape Coral, FL | 92.28% | 112 | 239 | |||
| Montgomery, AL | 87.64% | 70 | -86 | |||
| Tacoma, WA | 94.18% | 70 | 302 | |||
| Fort Lauderdale, FL | 94.26% | 68 | 49 | |||
| Reno, NV | 95.94% | 66 | 267 | |||
| Albuquerque, NM | 95.14% | 65 | 170 | |||
| Corpus Christi, TX | 92.69% | 63 | 11 | |||
| Augusta, GA | 93.28% | 62 | -44 | |||
| West Palm Beach, FL | 93.79% | 55 | -14 | |||
| Phoenix, AZ | 92.51% | 54 | 275 | |||
| Sacramento, CA | 94.60% | 53 | 51 | |||
|
National |
93.24% | 15 | 125 | |||
About Axiometrics
Axiometrics Inc. measures the performance of the apartment sector every month. The company tracks individual properties or portfolios owned by both private and publicly traded apartment REITs (Real Estate Investment Trusts), as well as properties owned and managed by private investors, developers, and management companies in more than 300 markets, totaling over 16,500 properties and 4.4 million units. Axiometrics delivers its data and analysis through a set of affordable, sophisticated tools that enable clients to improve property and investment performance at a fraction of the cost of the additional revenue generated. Learn more at www.axiometrics.com or call 214-953-2242.