Axiometrics is reporting that, nationally, 2014 ended strong for the apartment industry:
National annual effective rent growth in December 2014 reached 4.9%, the strongest monthly rate of 2014 (and even 2013 and 2012). The last time rent growth was this high was the 5.0% of August 2011. The rate has increased for 10 straight months and was higher than the previous month’s level for 11 of 12 months during 2014.
The December 2014 rate was 219 basis points (bps) higher than the 2.7% of December 2013. It was also a 21-bps increase from November’s 4.7%, which is interesting because the end of the year is usually when rents begin to decelerate because of seasonality. We just didn’t see that happen this year.
And the national occupancy rate was strong as well:
Occupancy was 94.6% in December, compared with 94.8% in November and 94.2% in December 2013. Although occupancy is down slightly from the 95% seen in mid-2014, it did not drop below 94% during 2014, and has not gone below that mark since March 2012. Also, the December 2014 occupancy rate is the highest reported in any December since Axiometrics began tracking monthly in 2008.
The ability of existing units to maintain occupancy rates at this level, even with the amount of new supply, definitely demonstrates how much demand there is for apartments. Developers and landlords can thank expanding job growth for this trend.