Multifamily sector slows during October

The multifamily market slowed during October.

Many property management companies may experience continued growth in the multifamily market, but this did slow slightly during the month of October.

A report from Axiometrics explained that despite a jump in employment, October experienced a slightly lower level of growth and occupancy. The rent growth level was 4.32 percent year-to-date in October, as well as 3.54 percent for annual rent growth, GlobeSt.com reported, citing the firm's numbers. The occupancy level still dropped to 94.4 percent from the previous figure of 94.5 percent, recorded in September.

However, the slight lull may not be a significant issues, as there are still many positive aspects to the market, as well as much to look forward to.

"[B]uilding-wise, we haven't seen a surge of new supply yet," KC Sanjay, senior economist for Axiometrics, told the news source. "It takes a little time for new construction to come online. We're about 70 to 80 basis points below the historical average."

There should be a gradual amount of new developments throughout the country, Sanjay further noted to the news source. While it won't be a significant amount, it could help improve many areas. This may help the market meet the construction average by 2014, as well.

However, much of this depends on further job growth. Sanjay explained to the news source that this needs to occur to help fill space in the new developments, as they come online. The "fiscal cliff" should be resolved, which could help job increases surpass 2 million next year.

Rent growth still strong in many areas
Despite some occupancy and rent growth issues on the national level, this was not the case for some major U.S. cities. Axiometrics explained that San Francisco's occupancy rate in October was 95.8 percent, while it had an annual effective rent growth level of 9.3 percent. Denver also had comparable figures, as its occupancy was 95.3 percent, and rent growth reached 6.5 percent.

Despite the stagnation explained by the Axiometrics report, improving occupancies were noted in a report from CBRE. For the third quarter, multifamily vacancies declined to 4.6 percent, which was 40 basis points lower than the level recorded during the third quarter of 2011.

Share
Disclaimer: All data and information provided on this site is for informational purposes only. Zoliath.com makes no representations as to accuracy, completeness, correctness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, opinions or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.