Apartment rents on the rise

Apartment rents increased in July.

Property management companies across the country experienced effective rent rate growth acceleration during July, according to a report from Axiometrics.

The year-to-date level of effective rent growth rose to approximately 4.4 percent during July, after an improvement of more than five percentage points compared to June. This put the figure well below the same point in 2011 – when it was more than 5.3 percent – but showed the situation stabilized in recent months.

"Since the tear the apartment market was on in July of 2011, there has been a gradual moderation in both effective rent and occupancy growth, though we are still near historical highs for both," said Ron Johnsey, president of Axiometrics. "Interestingly, new supply is also just now really starting to hit the market in a big way, so at this point it can't be faulted for the moderation in rent growth."

Rent growth didn't have much help from new supply during most of the first half of the year, but this could be changing significantly. The report noted that for the last half of the year, more than 55,000 new units will be finished, which will climb to nearly 130,000 next year.

Johnsey noted that the apartment market's performance over the next several months will inform industry members if the new developments will have a significant effect on the market. There will be nearly 90,000 new apartment units created and added to the country's overall inventory by next spring.

When looking at the top markets around the country, Corpus Christi was the most impressive, the report explained. Overall, the Texas city experienced an annual growth rate of more than 7.7 percent in July, which was more than double the figure during the same month in 2011. Six other areas experienced improved growth rates of more than 2 percent year-over-year.

Houston, Nashville, Denver and Southeast Florida have total growth rates this year that surpassed last year's figures, according to Johnsey.

The report added that the bottom markets struggled to keep up with last year's improved figures. However, six of these markets had annual growth rates in July. Specifically, San Jose still had a growth rate of more than 9 percent, but last July's figure was more than 15 percent.

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