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

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
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
SYS-CON Events announced today that Pulzze Systems will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Pulzze Systems, Inc. provides infrastructure products for the Internet of Things to enable any connected device and system to carry out matched operations without programming. For more information, visit http://www.pulzzesystems.com.
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will discuss how customers are able to achieve a level of transparency that e...
The Quantified Economy represents the total global addressable market (TAM) for IoT that, according to a recent IDC report, will grow to an unprecedented $1.3 trillion by 2019. With this the third wave of the Internet-global proliferation of connected devices, appliances and sensors is poised to take off in 2016. In his session at @ThingsExpo, David McLauchlan, CEO and co-founder of Buddy Platform, discussed how the ability to access and analyze the massive volume of streaming data from millio...
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
SYS-CON Events announced today that Interface Masters Technologies, a leader in Network Visibility and Uptime Solutions, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Interface Masters Technologies is a leading vendor in the network monitoring and high speed networking markets. Based in the heart of Silicon Valley, Interface Masters' expertise lies in Gigabit, 10 Gigabit and 40 Gigabit Eth...
Successful digital transformation requires new organizational competencies and capabilities. Research tells us that the biggest impediment to successful transformation is human; consequently, the biggest enabler is a properly skilled and empowered workforce. In the digital age, new individual and collective competencies are required. In his session at 19th Cloud Expo, Bob Newhouse, CEO and founder of Agilitiv, will draw together recent research and lessons learned from emerging and established ...
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?
As software becomes more and more complex, we, as software developers, have been splitting up our code into smaller and smaller components. This is also true for the environment in which we run our code: going from bare metal, to VMs to the modern-day Cloud Native world of containers, schedulers and microservices. While we have figured out how to run containerized applications in the cloud using schedulers, we've yet to come up with a good solution to bridge the gap between getting your conta...
One of biggest questions about Big Data is “How do we harness all that information for business use quickly and effectively?” Geographic Information Systems (GIS) or spatial technology is about more than making maps, but adding critical context and meaning to data of all types, coming from all different channels – even sensors. In his session at @ThingsExpo, William (Bill) Meehan, director of utility solutions for Esri, will take a closer look at the current state of spatial technology and ar...
SYS-CON Events announced today that Streamlyzer will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Streamlyzer is a powerful analytics for video streaming service that enables video streaming providers to monitor and analyze QoE (Quality-of-Experience) from end-user devices in real time.
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
DevOps theory promotes a culture of continuous improvement built on collaboration, empowerment, systems thinking, and feedback loops. But how do you collaborate effectively across the traditional silos? How can you make decisions without system-wide visibility? How can you see the whole system when it is spread across teams and locations? How do you close feedback loops across teams and activities delivering complex multi-tier, cloud, container, serverless, and/or API-based services?
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his session at @DevOpsSummit 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will show how customers are able to achieve a level of transparency that enables everyon...