Apartment Rents Rise Again
Multifamily rents posted a solid increase in February as the average national rate rose $7 to a record $1,175, reported Yardi Matrix, Englewood, Colo.
“During the current recovery cycle, February has been a good month for apartment owners,” said Yardi Matrix Director of Research and Publications Jack Kern. He noted rents rose 0.6 percent month-over-month in February and by 1.0 percent in February 2015 and 0.7 percent in February 2014.
National rents increased a healthy 5.9 percent between February 2015 and last month, down slightly from a 6.4 percent rate a month earlier. Yardi Matrix’s Apartment Trends Report said the 50-basis-point decrease reflects both February 2015’s strong gains and a signal that overall rent growth will likely moderate this year. The firm predicted a 4.5 percent increase for full-year 2016.
“With year-over-year rent increases near 6 percent and above the long-term trend in the majority of metros, it’s difficult to be too alarmed, but there are some areas of softness that bear watching,” the report said. “One concern is the declining growth in some of the tech-centric metros such as Portland [Ore.], San Francisco and Denver.” It noted that the tech sector has cooled, “with some public offerings canceled and smatterings of layoffs.”
The energy sector also bears watching as the price of crude oil remains near $30 a barrel, Yardi Matrix said: “Metros such as Houston, Denver and Pittsburgh are among the most impacted by cuts in the mining and drilling segments. Also, though new supply is no doubt badly needed on a national basis, it is having an impact on rent growth in some markets, including Atlanta, Houston and Denver.”
Nationally, rents increased 30 basis points on a trailing three-month basis, a 20 basis point jump from last month, Yardi Matrix said. Rents grew by 6.3 percent on a trailing 12-month basis, which averages the last 12 months compared to the prior-year period. That represented a 10 basis point increase over January.
Yardi Matrix said the west continues to lead the top performers list, led by Portland (14.0 percent), San Francisco (11.6 percent), Denver and Sacramento (each at 10.5 percent) and Seattle (9.6 percent). And this geographical trend is not limited to major metros. Smaller western markets such as Reno, Nev. (10.7 percent), Tacoma, Wash. (8.8 percent), San Fernando, Calif. (8.5 percent) and Colorado Springs, Colo. (8.3 percent) also produced outsize gains.
