Q1 2017 Rent Growth Steady, Occupancy Drops
Digested from the Wall Street Journal
As supply continues to grow—particularly of high-end apartment communities in urban cores—rent growth has flattened and the occupancy rate has slipped slightly, according to first quarter data from Reis and RealPage.
Rents in Q1 2017 were flat in 28 of the 79 metropolitan areas covered by Reis Inc., up from 14 markets in the previous quarter. However, national rent growth was still positive, at 3.1 percent, though down from the 5 percent rent growth posted in Q1 2016.
“Pricing momentum remains strongest in the middle-market Class B properties,” says Jay Denton, vice president of RealPage’s Axiometrics business group, in a press release. “Results are more hit-and-miss moving up the spectrum in product quality. Top-tier projects in neighborhoods with the most construction are struggling to push rents at all.” RealPage pegs national average rent growth for the quarter at 3.7 percent.
Meanwhile, Axiometrics, recently bought by RealPage, reports that the current U.S. apartment occupancy rate is 94.5 percent, down from 95.1 percent last fall. “Demand recorded during the past two quarters fell more than 100,000 units short of deliveries that totaled 164,549 units in the six-month period,” says company’s press release.
According to Axiometrics data, 581,556 apartment units are currently under construction across the country. Scheduled deliveries should average 102,000 units per quarter for the rest of 2017; the recent quarterly average has been 82,000 units.