Recently, we’ve seen several positive signs indicating that the apartment industry had shaken off the worst impact of the pandemic and was headed in the direction of a recovery.
Unfortunately, that forward momentum wasn’t present during the seven-day period ending on July 12, according to data from Radix.
Traffic and leases were down for a second straight week in most metropolitan statistical areas (MSA), and the national occupancy and leased-percentage rates took noticeable week-over-week dips.
The resurgence of new coronavirus cases in many MSAs and the resulting partial shutdowns in lots of those areas are certainly part of the explanation. Still, it is too early to draw sweeping conclusions about what the rest of the summer and the early part of the fall will look like. At Radix, we will continue to monitor the leading indicators (traffic and leases) for any signs of a deepening downward trend, which would invariably impact occupancy and leased percentage within weeks if the trend continues.
Below are some of the specific takeaways from the week ending on July 12:
- Nationally, traffic and lease were down pretty significantly WoW, suffering dips of 8.5% and 11.1%, respectively. This is one of the steepest WoW declines for the two metrics since the very early stages of the pandemic in March. On a national basis, both metrics had closed their year-over-year gaps quite a bit in recent weeks. However, if precipitous WoW declines continue, then we are likely to see those YoY gaps widen once again.
- The national occupancy rate stood at 93.52%. That’s a WoW drop of 10 basis points and a YoY decline of 1.0%. Meanwhile, the national leased-percentage rate was 95.03%; that represented a decline of 10 basis points from one week earlier and a dip of 0.8% from the same time last year. If traffic and leases continue declining at an accelerated pace like they did in the week of July 12, we are likely to see occupancy and leased percentage dropping faster in two to three weeks as well.
- At $1,667, the national net effective rent was the same as the week before and was down 7.7% YoY. The largest YoY declines were in Houston (-13.4%) and San Jose, Calif. (-13.3%). Only three of the 21 MSAs tracked by Radix experienced YoY increases: Riverside, Calif. (+3.5%), San Antonio (+2.8%) and Tampa (+0.1%).