News Feed Item

Apartment Market Has Strongest Quarter Since 2000

DALLAS, TX--(Marketwired - June 30, 2014) - The second quarter of 2014 has emerged as the strongest quarter for the U.S. apartment market since the third quarter of 2000, according to early release figures from Axiometrics, the leading supplier of apartment data and research.

Effective rent growth was 2.4% on a quarterly basis nationwide in April-June 2014, the highest quarter-to-quarter rate since the 2.9% of July-September 2000. Occupancy in the second quarter of 2014 was 95.0%, the strongest since the first quarter of 2001 (95.6%).

Both rent growth and occupancy exceeded expectations.

"The year started slowly for the apartment market, perhaps due to weather, but it experienced a major reacceleration during the second quarter," Axiometrics Vice President of Research Jay Denton said, referring to the major winter storms and bitter cold temperatures that gripped much of the nation during the early part of the year. "Effective rent growth was soft in January and February, but the period from March through May was the one of the strongest three-month stretches we've seen in the 19 years we've been tracking apartments." 

Another reason for the strong apartment performance just may be the falling home-ownership rate, Denton added. U.S. Census Bureau statistics show that the home-ownership rate in the first quarter of 2014 was 64.8%, the lowest in 19 years -- since the second quarter of 1995, when the rate was 64.7%.

"Demographics, along with the increasing choice to rent rather than own, continue to play in the favor of apartments," Denton said.

The second-quarter effective rent growth was a big improvement from the first-quarter quarter's 0.5%, an increase from the -0.9% recorded in the fourth quarter of 2013, measured on a quarter-over-quarter basis. Occupancy was up 60 basis points from the first quarter's 94.4%, ending a two-quarter streak of decline.

Annualized effective rent growth was 3.3% in the April-June 2014 time frame, up from 2.9% in the January-March period. That matches the second-quarter 2013 rate and marks the second straight quarter in which the annualized effective rent growth has increased.

These increases are taking place with 180,000 new units having been delivered in the past year.

"There is more supply on the way, but the apartment market is merely returning to a more 'normal' level of construction," Denton said. "It is important to note that total residential construction, including single-family homes, is still well below the historical norm. This prolonged period of lower-than-normal residential construction has allowed apartment occupancy rates to surge to a level not achieved since 2001."

The second-quarter strength is further confirmation that, as Axiometrics has reported previously, the rental base is changing, Denton added. Most of the new units are geared toward higher-income individuals.

Most of these high-rent submarkets are in the urban core, where many millennials and others like to live to be closer to their work and play. Also, many in this age cohort group like the flexibility of renting versus owning, while others might be falling victim to stringent mortgage-lending requirements.

But, Denton said, the renters outside the core are staying put, and they, too, might not quite make the mortgage-qualification standards because of credit and/or income issues.

The 25 top Metropolitan Statistical Areas or Metropolitan Districts -- among Axiometrics' top 50 markets with the most apartments -- by quarterly effective rent growth for the second quarter of 2014 were:

MSA/Metro District                                      2Q14 Eff Rent Growth
1.    San Jose-Sunnyvale-Santa Clara, CA                5.1%                
2.    Oakland-Fremont-Hayward, CA                       4.6%                
3.    Denver-Aurora, CO                                 4.3%                
4.    Boston-Cambridge-Quincy, MA-NH                    4.3%                
5.    Seattle-Bellevue-Everett, WA                      4.0%                
6.    Sacramento-Arden-Arcade-Roseville, CA             3.9%                
7.    San Francisco-San Mateo-Redwood City, CA          3.5%                
8.    Chicago-Naperville-Joliet, IL                     3.5%                
9.    Atlanta-Sandy Springs-Marietta, GA                3.2%                
10.   Portland-Vancouver-Beaverton, OR-WA               3.1%                
11.   Nashville-Davidson-Murfreesboro, TN               2.9%                
12.   Fort Worth-Arlington, TX                          2.9%                
13.   Columbus, OH                                      2.8%                
14.   Philadelphia, PA                                  2.7%                
15.   Charlotte-Gastonia-Concord, NC-SC                 2.7%                
16.   New York-Wayne-White Plains, NY-NJ                2.6%                
17.   Houston-Baytown-Sugar Land, TX                    2.4%                
18.   Baltimore-Towson, MD                              2.3%                
19.   Washington-Arlington-Alexandria, DC-VA-MD-WV      2.2%                
20.   Fort Lauderdale-Pompano Beach-Deerfield Beach, FL 2.2%                
21.   San Diego-Carlsbad-San Marcos, CA                 2.2%                
22.   Richmond, VA                                      2.2%                
23.   Las Vegas-Paradise, NV                            2.1%                
24.   Indianapolis, IN                                  2.0%                
25.   Edison, NJ                                        2.0%                

The top 25 markets on an annualized effective rent growth basis, among the top 50 markets:

MSA/Metro District                                      Annualized 2Q14 eff.
                                                        Rent growth         
1.    Oakland-Fremont-Hayward, CA                       9.0%                
2.    San Jose-Sunnyvale-Santa Clara, CA                7.9%                
3.    Denver-Aurora, CO                                 7.6%                
4.    Atlanta-Sandy Springs-Marietta, GA                6.7%                
5.    Sacramento-Arden-Arcade-Roseville, CA             6.5%                
6.    Seattle-Bellevue-Everett, WA                      6.1%                
7.    Miami-Miami Beach-Kendall, FL                     6.1%                
8.    Portland-Vancouver-Beaverton, OR-WA               5.8%                
9.    West Palm Beach-Boca Raton-Boynton Beach, FL      5.7%                
10.   San Francisco-San Mateo-Redwood City, CA          5.6%                
11.   Nashville-Davidson-Murfreesboro, TN               5.3%                
12.   Houston-Baytown-Sugar Land, TX                    5.1%                
13.   Fort Lauderdale-Pompano Beach-Deerfield Beach, FL 5.0%                
14.   Austin-Round Rock, TX                             4.4%                
15.   Phoenix-Mesa-Scottsdale, AZ                       4.4%                
16.   Riverside-San Bernardino-Ontario, CA              4.2%                
17.   Fort Worth-Arlington, TX                          3.9%                
18.   Los Angeles-Long Beach-Glendale, CA               3.8%                
19.   San Diego-Carlsbad-San Marcos, CA                 3.8%                
20.   Orlando, FL                                       3.6%                
21.   Dallas-Plano-Irving, TX                           3.4%                
22.   Warren-Farmington Hills-Troy, MI                  3.3%                
23.   Las Vegas-Paradise, NV                            3.3%                
24.   Greensboro-High Point, NC                         3.0%                
25.   Kansas City, MO-KS                                2.9%                

The top 25 metro areas by occupancy, among the top 50, in the second quarter of 2014 were:

MSA/Metro District                                      2Q14Occ   OccChange 
1.    Minneapolis-Saint Paul-Bloomington, MN-WI         96.9%     -0.2%     
2.    New York-Wayne-White Plains, NY-NJ                96.8%     -0.2%     
3.    Oakland-Fremont-Hayward, CA                       96.8%     0.2%      
4.    San Jose-Sunnyvale-Santa Clara, CA                96.5%     0.1%      
5.    Miami-Miami Beach-Kendall, FL                     96.3%     -0.1%     
6.    Seattle-Bellevue-Everett, WA                      96.2%     0.2%                                                                             
7.    Nashville-Davidson-Murfreesboro, TN               96.2%     0.5%      
8.    Portland-Vancouver-Beaverton, OR-WA               96.2%     0.1%      
9.    San Diego-Carlsbad-San Marcos, CA                 96.2%     0.1%      
10.   Sacramento-Arden-Arcade-Roseville, CA             96.1%     1.7%      
11.   San Francisco-San Mateo-Redwood City, CA          96.0%     0.3%      
12.   Edison, NJ                                        96.0%     -0.9%     
13.   Denver-Aurora, CO                                 95.9%     0.3%      
14.   Boston-Cambridge-Quincy, MA-NH                    95.9%     -0.2%     
15.   Columbus, OH                                      95.9%     0.2%      
16.   Los Angeles-Long Beach-Glendale, CA               95.8%     0.7%      
17.   Warren-Farmington Hills-Troy, MI                  95.8%     -0.4%     
18.   Fort Lauderdale-Pompano Beach-Deerfield Beach, FL 95.8%     0.8%      
19.   Santa Ana-Anaheim-Irvine, CA                      95.6%     0.4%      
20.   Chicago-Naperville-Joliet, IL                     95.5%     0.1%      
21.   Austin-Round Rock, TX                             95.5%     0.3%                                                                                
22.   Salt Lake City, UT                                95.5%     -0.3%     
23.   Kansas City, MO-KS                                95.3%     0.2%      
24.   West Palm Beach-Boca Raton-Boynton Beach, FL      95.3%     0.6%      
25.   Riverside-San Bernardino-Ontario, CA              95.3%     0.9%      

Axiometrics improves property and portfolio performance for apartment investments. Confident investment decisions begin with reliable, timely information. No one has more accurate, detailed, and up-to-date research on the apartment and student housing markets. Learn more at www.axiometrics.com or by calling 214-953-2242.

Image Available: http://www.marketwire.com/library/MwGo/2014/6/30/11G017651/Images/PR_6.30.14-1039550809356.JPG

Ross Coulter
MPD Ventures
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER give you detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPO also offers s...
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
@DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises - and delivering real results.
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
"We started a Master of Science in business analytics - that's the hot topic. We serve the business community around San Francisco so we educate the working professionals and this is where they all want to be," explained Judy Lee, Associate Professor and Department Chair at Golden Gate University, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
DXWorldEXPO LLC announced today that Dez Blanchfield joined the faculty of CloudEXPO's "10-Year Anniversary Event" which will take place on November 11-13, 2018 in New York City. Dez is a strategic leader in business and digital transformation with 25 years of experience in the IT and telecommunications industries developing strategies and implementing business initiatives. He has a breadth of expertise spanning technologies such as cloud computing, big data and analytics, cognitive computing, m...
Digital Transformation and Disruption, Amazon Style - What You Can Learn. Chris Kocher is a co-founder of Grey Heron, a management and strategic marketing consulting firm. He has 25+ years in both strategic and hands-on operating experience helping executives and investors build revenues and shareholder value. He has consulted with over 130 companies on innovating with new business models, product strategies and monetization. Chris has held management positions at HP and Symantec in addition to ...
Cloud-enabled transformation has evolved from cost saving measure to business innovation strategy -- one that combines the cloud with cognitive capabilities to drive market disruption. Learn how you can achieve the insight and agility you need to gain a competitive advantage. Industry-acclaimed CTO and cloud expert, Shankar Kalyana presents. Only the most exceptional IBMers are appointed with the rare distinction of IBM Fellow, the highest technical honor in the company. Shankar has also receive...
There is a huge demand for responsive, real-time mobile and web experiences, but current architectural patterns do not easily accommodate applications that respond to events in real time. Common solutions using message queues or HTTP long-polling quickly lead to resiliency, scalability and development velocity challenges. In his session at 21st Cloud Expo, Ryland Degnan, a Senior Software Engineer on the Netflix Edge Platform team, will discuss how by leveraging a reactive stream-based protocol,...
DXWorldEXPO LLC announced today that Kevin Jackson joined the faculty of CloudEXPO's "10-Year Anniversary Event" which will take place on November 11-13, 2018 in New York City. Kevin L. Jackson is a globally recognized cloud computing expert and Founder/Author of the award winning "Cloud Musings" blog. Mr. Jackson has also been recognized as a "Top 100 Cybersecurity Influencer and Brand" by Onalytica (2015), a Huffington Post "Top 100 Cloud Computing Experts on Twitter" (2013) and a "Top 50 C...
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities - ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups.
Daniel Jones is CTO of EngineerBetter, helping enterprises deliver value faster. Previously he was an IT consultant, indie video games developer, head of web development in the finance sector, and an award-winning martial artist. Continuous Delivery makes it possible to exploit findings of cognitive psychology and neuroscience to increase the productivity and happiness of our teams.
The standardization of container runtimes and images has sparked the creation of an almost overwhelming number of new open source projects that build on and otherwise work with these specifications. Of course, there's Kubernetes, which orchestrates and manages collections of containers. It was one of the first and best-known examples of projects that make containers truly useful for production use. However, more recently, the container ecosystem has truly exploded. A service mesh like Istio addr...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory? In her Day 2 Keynote at @DevOpsSummit at 21st Cloud Expo, Aruna Ravichandran, VP, DevOps Solutions Marketing, CA Technologies, was jo...