Mar 31, 2019
Greg Willett is the Chief Economist for RealPage. He is the
nations top apartment economist that bankers, general partners and
investors listen to. Here are some of his thoughts:
The U.S. apartment rents climbed 3.2 percent on an annual basis as of the first quarter of 2019. Annual rent growth has topped the 3 percent mark for six consecutive months, accelerating from a pace that had hovered around 2.7 percent in all of 2017 and in the initial nine months of 2018. Occupancy stood at 95.2 percent for the first quarter, edging up from 95.1 percent a year ago. However, since the cold weather months are a period of limited leasing activity, occupancy has slipped from its third quarter 2018 seasonal peak of 95.8 percent.
Greg mentioned, “It’s encouraging for apartment investors to see rent growth holding up so well when the new supply volumes are aggressive, while brand new properties still moving through the lease-up process tend to be offering discounts, pricing power actually has improved a bit for luxury developments where the initial resident base is now in place. Properties at middle-tier to lower-end price points are maintaining their already-strong rent growth momentum.”
Among the country’s large metros, local rent growth leaders are Phoenix and Las Vegas, each area posting annual price jumps around 8 percent. At the next tier of performance, rent growth reaches 5 percent or a little better in Atlanta, Greensboro/Winston-Salem, Memphis and Sacramento.
Some small metros are experiencing even stronger rent boosts. Rents are up 15.2 percent in the West Texas Oil Patch markets of Midland and Odessa, while price increases of roughly 7 to 8 percent are occurring in Wilmington, N.C.; Tucson, Ariz.; and Gainesville, Fla.
Houston’s performance is the weakest among big metros, with rents in the first quarter matching prices from a year ago. Slight rent cuts are occurring in three small markets: College Station, Texas; Fargo, N.D.; and Santa Rosa, Calif.
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