The U.S. apartment market is on a winning streak, according to data from Axiometrics, a leader in apartment and student housing research and analysis.
The occupancy rate for May was 95.3%, despite record new supply. Axiometrics considers 95% occupancy a “functionally full” market.
Annual effective rent growth for U.S. apartments reached 5.0% for the first time in four years. Axiometrics points to a shift in rent growth in previously stagnant markets including Chicago, St. Louis, Philadelphia, Kansas City, Baltimore and Detroit.
Average national rent was $1,211 for the second quarter of 2015, a $58 increase from the average of $1,153 the same period last year.
The Top 10 Rental Markets
Oakland remains the hottest market with 14.3% rent growth, but this was the first time in at least a year that all three Bay City markets did not make the top five. San Francisco fell to sixth place as more renters simply were priced out of the market, signaling that the extremely high rent growth in the Bay Area may be unsustainable in the long term.
Portland, Oregon, moved into second place, followed by Denver, Sacramento, and San Jose. Riverside, California, Seattle, Atlanta, and Las Vegas made the top ten.
The West dominated the charts for market growth, although San Diego and Anaheim dropped downwards. Other markets remained strong, including Dallas, Ft. Worth, Orlando and Palm Beach, Florida.
There is reason to be cautious, however. Axiometrics notes that affordability could become an issue in some markets, and the high rent-growth levels in other markets are unsustainable.
Axiometrics specializes in monitoring apartment and student housing markets, providing an in-depth view of volatile market trends. This analysis can help rental property owners and investors make intelligent — and profitable decisions. Landlords may request a free assessment to analyze a specific property, submarket or market on Axiometrics’ portal and subscribe to Axiometrics’ newsletters for updated numbers and trends. To learn more, visit www.axiometrics.com.
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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.