After the week ending on July 12 brought with it a bevy of bad stats, the following week showed a nice upturn.
In general, the apartment market has shown fairly steady improvement since its low points early on in the pandemic. Last week, I cautioned that one bad week can be just that: one bad week. I urged readers not to worry too much until we saw leading indicators like traffic and leases continue to decline over several weeks in a row.
Fortunately, during the week ending on July 19, we saw moderately positive uptick across most data points and most markets, according to Radix.
Nationally, leases and traffic increased on a week-over-week basis, with the former also increasing when compared to the same time last year. The national occupancy and leased-percentage rates were up slightly from the preceding week, and the metrics also closed their year-over-year gaps that were so large in the initial stages of the pandemic. Impressively, even the average net effective rent in the U.S. rose 10 basis points from the week before.
To be sure, these were, overall, not outsized gains. But when we consider the July 12 data, it certainly is a positive to see the declines of that week come to a stop. We will continue to monitor the data to see if the gains morph into a longer-term positive trend over the next several weeks.
Below are some of the specific takeaways from the week ending on July 19:
Nationally, traffic and leases were up 13.1% and 17.7%, respectively, when compared to the preceding week. The vast majority of the 22 individual metropolitan statistical areas tracked by Radix recorded positive WoW trends in these two metrics. On a national basis, leases also increased by 5.5% when compared to the same time last year. Traffic was still down 18.4% vs. last year, but the YoY gap was smaller than it was during the week of July 12.
The national occupancy (93.62%) and leased percentage (95.18%) rates rose by 10 and 20 basis points respectively, when compared with the preceding week. Only a few individual markets trended downwards WoW in these two areas. On a national level, both statistics continue to trail where they were one year ago – occupancy by 0.9% and leased percentage by 0.6% – but, once again, the YoY gaps compressed when compared to what they were during the preceding week.
At $1,660, the national net effective rent increased by 10 basis points WoW; during the week of July 12, it was essentially flat when compared to the week before. Net effective rents increased WoW in 12 of the MSAs tracked by Radix. However, the national net effective rent was still down by 7.5% YoY.
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%).
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%).
The seven-day period ending on June 17 brought more good news for the apartment industry, according to our most recent data report.
The data reaffirmed the positive trends we saw during the preceding week, and it is becoming clearer that all the leading indicators are on the mend and are erasing year-over-year deficits. On a national basis and in most metropolitan statistical areas, traffic and leases are increasing week over week, which is leading to WoW increases in occupancy and leased percentage rates.
Net effective rents were also up WoW in eight of the 21 MSAs tracked by Radix during the week ending on June 17. The national net effective rent was $1,734; that’s down 20 basis points from the preceding week and down 4.5% from the same time last year. On a positive note, the WoW drop was smaller than the one during the preceding week.
With that background, here are some of the notable takeaways from the week ending on June 17:
Nationally, traffic was up 6.3% WoW and down 19.8% YoY. During the week ending on June 10, the YoY was still behind at 22.7%.
On a national basis, leases were up 2.2% WoW and down just 0.7% when compared with the same time last year.
The national occupancy (92.85%) and leased percentage (94.75%) rates were up WoW by 12 basis points and 14 basis points, respectively. The YoY deficits for both metrics are getting smaller, and with positive trends in traffic and leases, we should see occupancy and leased percentage rates continue to gain strength across the country.
As for individual MSAs, Miami, Riverside, Calif., and Tampa, Fla., saw the largest WoW increases in occupancy. Meanwhile, the West Coast is home to some of the largest YoY declines in occupancy, with San Diego (-3.32%), Seattle (-3.08%), San Jose, Calif. (-2.72%), San Francisco (-2.58%), and Los Angeles (-2.49%) all among the six markets with the largest annual declines. San Antonio (-2.91%) also is in the top six.
The $3 WoW dip in the national net effective rent represented the smallest decline in weeks. MSAs with the strongest WoW gain in rent were Riverside (1.0%), Las Vegas (0.9%) and Phoenix (0.3%).
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.
At Radix, we’ve been keeping a close eye on both national and local performance data as the pandemic unfolds. As June arrives and the summer begins, I think we all wish we could just undo 2020 and start anew.
During the week ending on June 3, most of the major performance metrics were flat to slightly negative, according to our data.
Nationally, traffic was up on a week-over-week basis, and the metric has been making up for the ground it lost during the early stages of the pandemic. Leases were slightly down for the week, but now stand only 13.3% below versus the same time last year. If leasing pace continues to improve, we should be on par with last year in a few weeks. It will also be a strong sign of demand improvement from the low record hit during the first phase of the lockdowns.
While the national net effective rent dipped only by 0.4% WoW, the year-over-year gap has been increasing and now stands at -3.5%.
It is still too early to tell how much protests and riots have impacted traffic and leasing, but next week’s data should give us a better indication of the overall effect. This could be part of the explanation why markets that have opened and showed strong traffic and leases during the week ending on May 27 – such as Atlanta, Houston and Tampa – registered slight declines in this week’s data.
Here are some of the notable takeaways from the week ending on June 3:
Nationally, traffic was up 3.8% when compared to the preceding week, while leases were down 5.2% The metropolitan statistical areas (MSAs) with the biggest WoW traffic increase was Dallas (22.5%). The MSA with the largest WoW decline in leases was Los Angeles (-21.9%).
The national occupancy rate stood at 92.83%. That represents a dip of 0.01% from the preceding week and a decrease of 1.69% when compared to the same time last year. The MSA with the largest WoW decrease was Miami (-0.47%).
The national leased percentage rate was 94.59%. That’s a WoW decrease of 2 basis points and a YoY drop of 1.37%. The MSA with the biggest WoW decrease was San Antonio (-0.52%).
The national net effective rent was $1,744. That’s down 0.4% from the preceding week and down 3.5% from the same time last year. Chicago experienced the largest WoW decrease (-3.5%).
Traffic and Leases Continue Week-Over-Week Improvements During Pandemic
As April drew to a close, most of the country was still in lockdown mode. But we have begun to see some states start to lift the restrictions they put in place five to six weeks ago.
And although most of us contend it will be a while before things return to normal – or something resembling our former days – new data from Radix shows that the apartment industry is finding its footing as it relates to the leading indicators of traffic and leases.
During the week ending on April 29, both traffic and leases increased on a national basis when compared with the preceding seven days. This was the latest in a series of week-over-week improvements for these stats after they reached a low point four weeks ago.
This trend suggests the worst may be over when it comes to these two metrics. As states continue to open, these numbers should continue to inch up, though most likely concessions and rent discounts will remain in order to attract prospects to properties.
With that being said, let’s get to the major takeaways from the week ending on April 29:
Traffic and leases were up 9.4% and 9.5%, respectively, WoW, but they were still down 51.2% and 29.4%, respectively, YoY. For context, it is worth remembering that leases were down 50% YoY just four weeks ago.
The national same-store occupancy rate stood at 93.27%. That’s down 0.11 percent from one week earlier and a full 101 basis points from the same time last year. The metros with the largest YoY declines were Orlando (-2.66%), San Diego (-1.94%) and San Francisco (-1.86%).
The national same-store leased rate was 94.69%, up 0.01% from the preceding week but down 1.03% YoY. The metros with the biggest YoY declines were Washington D.C. (-2.01%), Las Vegas (-1.69%) and San Antonio (-1.68%).
At $1,815, the average net effective rent in the U.S. was down 0.5% from one week earlier but was still 0.3% higher than it had been at the same time last year. That we could still see a positive YoY comparison after six weeks of a pandemic is a testament to the strong rent growth we have seen in the last decade in most markets.
I hope you continue to check our website as the pandemic continues, as I will be providing weekly updates of these stats. As always, I wish you, your families, your colleagues and your residents’ health and safety.