Top 20 Apartment Markets for Rent Growth for Q2 2014

The U.S. apartment market had about as impressive a second quarter as you can get. Occupancy jumped up to a seven-year high, even with newly built units hitting the market in large numbers. And quarterly rent growth reached a 14-year high.

The annual effective rent growth pace, as of the second quarter, came in at 3.5 percent, trending upward from 3.2 percent in the first quarter of 2014 and 2.9 percent in the fourth quarter of 2013.

On the occupancy front, the nation’s 100 largest markets registered a 95.6 percent as of the second quarter, an improvement from 95.0 percent as of the first quarter. More telling is that the second quarter 2014 occupancy rate moved slightly ahead of the second quarter 2013 figure of 95.3 percent.

But when MPF Research releases these quarterly numbers, the question on everybody’s mind tends to be: “What are the top 10 apartment markets for rent growth?”

Without further ado, let’s go to the leaderboard.

Annual Rent Growth Leaders Year-Ending Q2 2014
Rank Metro Annual Rent Growth
1 Oakland 9.4%
2 San Jose 8.9%
3 Denver-Boulder 8.4%
4 Portland 7.4%
5 Houston 5.6%
6 Atlanta 5.5%
7 Seattle-Tacoma 5.3%
8 Sacramento 5.2%
9 San Francisco 5.1%
10 Miami 5.0%

Better Late than Never: Sacramento Breaks into the Top 10

The Sacramento metro is very much a late recovery market. But now that occupancy is filling up, owners and operators are able to generate some pricing momentum as evidenced by an annual rent growth rate of 5.2%, allowing it to break into the top ten leaderboard at number eight.

What Happened to San Francisco?

While Sacramento finally landed in the top 10, San Francisco nearly slipped out. So what happened to an apartment market that is regularly in the top three for annual rent growth? Well, as Greg Willett puts it, annual rent growth in San Francisco “just tends to be a bit lumpier” than what you see in the other two bay area markets. Expect San Fran to smooth things out over the next couple of quarters and return to battling for the top spot.

The Next 10 Best Apartment Markets for Rent Growth

Because the overall apartment market was so healthy this past quarter, MPF Research released numbers 11 through 20 from the rent growth leaderboard.

Annual Rent Growth Leaders Year-Ending Q2 2014
Rank Metro Annual Rent Growth
11 Nashville 4.8%
12 Fort Lauderdale 4.5%
13 West Palm Beach 4.3%
14 Austin 4.1%
15 Fort Worth 4.0%
16 Los Angeles 3.9%
17 Dallas 3.8%
18 (Tie) Phoenix 3.7%
18 (Tie) San Diego 3.7%
20 Boston 3.5%

Annual Rent Growth Laggards for Year-Ending Q2 2014

Despite all of the positive news and numbers for apartment markets during the second quarter, a couple of metros were unable to generate any momentum. The one metro that actually cut rents was the Virginia Beach/Norfolk market where rents dropped 0.4% year over year. One other laggard of note was Raleigh/Durham where rent growth registered a goose egg thanks to a massive amount of new supply.

 Read the original article here.

(Image source: Shutterstock)

Advertisements
This entry was posted in 2014, Austin, Dallas- Fort Worth, Florida, Growth, Houston, Market trends, Multifamily, North Carolina, Population, Rents, Report, San Antonio, Supply, Texas and tagged . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s