Apartment market growth slows in October

The apartment market experienced a lower growth level last month.

While the multifamily situation had some declines in the third quarter, it was due to many property management companies experiencing the usual autumn lull, according to a report from Axiometrics.

Occupancy levels for apartments dropped slightly more than 0.1 percent during the month, while effective rent rates dropped approximately 0.3 percent. The figures were not much different from last year and in 2010, the report explained.

Effective rent growth for the first 10 months of the year dropped to 4.4 percent last month, which was slightly lower than in September, when the figure was 4.69 percent. The growth levels were 4.88 percent in October of last year, while the same month in 2010 had a rate of 4.94 percent, the report noted. The highest year-to-date growth level this year was 4.73, which occurred in August.

October's monthly effective growth was mostly unchanged from the previous two years, the report explained. However, the overall slowdown was likely seasonal, but the declines were much less significant than in past years. Four years ago, the month had a 0.64 percent decline from September, while November and December experienced drops of more than 1 percent.

"So far, we are not seeing any macro-level indications signaling a larger-than-normal seasonal decline this fourth quarter, and the slight softening in effective rent growth and occupancy was to be expected," said Jay Denton, vice president of research for Axiometrics. "Heading into the last part of the year, the overriding trend for effective rents continues to be stable, positive growth."

The average rent level for the month of October was $1,072, which was slightly higher than in 2008, when the figure was $1,018, the report said. However, it was far higher than the cyclical bottom, which occurred in 2009. That level was $944.

Occupancy, levels remain stable in October
The October occupancy rate was 94.42 percent, which was slightly lower than September's level of 94.56 percent, the report explained. While still a drop, the figure was 0.8 percentage points improved from the beginning of the year. Additionally, it was 0.45 percentage points higher than the same month in 2011.

The report added that the top market for rent growth on an annual basis was San Francisco, which had an occupancy rate of 95.8 percent.

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