More positive apartment news! The multi-family sector nationally is growing, with occupancy climbing 0.6% as more and more people are living in apartments. This data matches the Portland data, as vacancies have decreased in Portland
as well by
similar amounts.
This article originally published in mutlifamily biz and re-posted on www.josephbernard.net
Strong Momentum Continues For Apartment Market
Wed, 2011-09-28
The U.S. apartment sector again posted robust revenue growth in the third quarter of 2011, according to MPF Research, an industry-leading market intelligence division of RealPage, Inc. (NASDAQ: RP). National occupancy climbed 0.6 percentage points during the past three months, and effective rents jumped 1.6 percent. A discussion of the nation’s latest apartment performance results is available at www.realpage.com/MPFQ3Report.
“Top-line revenue growth numbers for apartments remain terrific, despite the struggles seen in the general economy,” said Greg Willett, MPF Research vice president.
Occupancy reached 94.8 percent as of the third quarter, up from 93.8 percent a year ago and from 91.8 percent when the market’s performance bottomed in late 2009. “While occupancy isn’t yet at an all-time high, the rate has moved a little ahead of the average level recorded over the course of the past decade or so,” Willett said. “The unusually small number of households leaving rental units to buy homes is really the key influence behind today’s strong apartment occupancy performance. Furthermore, it just doesn’t take much new demand to surpass the small block of new supply that’s coming online right now.”
Rents in U.S. apartments grew 4.2 percent between the third quarter of 2010 and third quarter of 2011. The total increase seen since pricing bottomed in late 2009 is right at 7 percent.
“All the bad news that’s out there about the state of the overall economy is making apartment owners and managers a little nervous,” Willett said. “To date, however, operators clearly aren’t letting some uncertainty about the future play much of a role when setting current rents.”
MPF Research is anticipating that overall revenue growth for apartments in 2012 will look very similar to the results posted in 2011. Occupancy is expected to climb another half percent to 1 percent, and rents are forecast to again rise between 4 and 5 percent.
Performance by product niche could shift in the near term, however, Willett notes. “While top-tier developments currently are registering by far the best occupancy and rent growth in most metros, further pricing increases may push those properties outside the affordability range for some households. We expect to see general churn pick up in the renter base from the low levels recorded recently. Some households will move down to properties that are a little less desirable in terms of overall quality. Other renters may opt for smaller units or combine separate households into roommate living arrangements.”
San Francisco and neighboring San Jose ranked as the nation’s metro-level rent growth leaders between third quarter 2010 and third quarter 2011. Prices surged 13.4 percent in San Francisco and 13.1 percent in San Jose.
Ten other large markets recorded rent growth between 5 and 8 percent on an annual basis. Rental rates jumped 7.7 percent in Oakland and 7.3 percent in Seattle while growth registered at 6.9 percent in Austin, 6.6 percent in New York and 6.2 percent in Minneapolis. Additional increases included 5.9 percent for Boston and Pittsburgh, while pricing climbed 5.7 percent in Denver, 5.5 percent in Portland and 5.4 percent in Charlotte.
The list of metro-level rent growth leaders has been consistent from one quarter to another of late, according to the MPF Research data.
Excerpt from the article posted on MultifamilyBiz.com.
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