With the Fourth of July on the horizon, we continue to see positive developments when it comes to leading indicators in the apartment industry, according to new data from Radix.
On a national basis, both traffic and leases were slightly down on a week-over-week basis during the seven days ending on June 24. However, traffic is now only 15.6% behind when compared to the same time last year, and leases are up 3.9% from one year ago.
Also encouraging: both occupancy and leased percentage have increased for three weeks in a row. YoY, both metrics were still down 1.59% and 1.10%, respectively. But if the leading indicators such as traffic and leases continue to move in a generally positive direction, the YoY gaps in occupancy and leased percentage should close.
As for the national net effective rent (NER), that metric declined again WoW, and in fact the decline accelerated when compared to the preceding week (-0.4% for the seven days ending on June 24 vs. -0.2% for the seven days ending on June 17). However, YoY, the gap has shrunk slightly. The strongest headwinds to NER growth remain a resurgence of coronavirus cases (which are increasing in most MSAs) and continued economic fallout and uncertainty due to an increase in new cases.
With that background, here are more notable takeaways from the week ending on June 24:
- As mentioned above, nationally both traffic and leases were slightly down WoW (0.7% and 1.1%, respectively). However, as also noted, the YoY trends are strong. Operators have clearly figured out ways to drive traffic and lease to make up for the ground they lost during the peak of the pandemic.
- The national occupancy rate was 92.94%, and the leased percentage rate was 94.94%. That’s a WoW increase of 10 basis points and 19 basis points, respectively.
- Fourteen of the 21 MSAs tracked by Radix saw their occupancy rates increased from the preceding week. The largest WoW increases were found in San Antonio (0.63%), Orlando (0.62%) and Denver (0.42%). The largest WoW decreases recorded in Miami (-0.84%), San Jose, Calif., (-0.45%) and Portland, Ore. (-0.31%).
- At $1,727, the national NER stood 0.4% lower than the week before and 4.3% lower than the same time last year. On a WoW basis, NER declined in 13 of the MSAs tracked by Radix. Metros with the largest WoW decline were San Francisco (-1.4%), Riverside, Calif., (-1.1%) and Houston (-0.9%).