Signs of Optimism for the Apartment Market
With states opening up from their pandemic shutdowns, May’s employment numbers were a pleasant surprise (finally, some good news!)
It looks like these trends are positively impacting the apartment industry. During the week ending on June 10, we saw some of the most encouraging signs of improvement in leading indicators since the pandemic hit.
According to Radix, both traffic and leases were up. If this trend continues, we should start to see the year-over-year declines in occupancy and leased percentage rates begin to compress. As of June 10, the occupancy and leased percentage rates were down by 1.72% and 1.34%, respectively, from the same time last year.
In addition, even the week-over-week decline in net effective rent has started to slow. Perhaps with improvements in leading indicators and occupancy and leased percentage, we will see a gradual stabilization in rent as well.
Now that you have the broad-picture summary, let’s dig into some of the specific takeaways from the week of June 10:
- Nationally, traffic was up 12% WoW. It’s still down 22.7% YoY, but that’s a smaller gap than earlier in the pandemic.
- On a national basis, leases increased by 17.8% WoW. Leases also were up by 2.3% when compared to the same time last year; this is the first time in three months that leases increased YoY.
- The national occupancy rate (92.72%) declined 11 basis points WoW, and the YoY gap increased to -1.72%. However, the leased percentage rate (94.61%) was up slightly for the week by 2 basis points, and the gap vs. last year is down to -1.34%.
- In terms of metropolitan statistical areas, San Diego, San Jose, Seattle and San Francisco were the markets with the biggest YoY drops in occupancy rate. San Francisco, San Diego and San Jose are also in the top three in terms YoY dips in leased percentage rate. Meanwhile Phoenix, Dallas and Tampa are the closest to erasing their YoY gaps in leased percentage rate.
- At $1,737, the national net effective rent declined WoW by 30 basis points. The figure represented a 3.9% decrease from the same time last year. Atlanta (-12.4%), Orlando (-10.2%), San Jose (-8.5%) and San Francisco (-7.0%) had the biggest YoY declines.