Many Performance Metrics Holding Steady as Summer Comes to an End

Labor Day marked the unofficial end of summer. And what a summer it was for all of us!

On a national basis, multifamily data and metrics have been hovering around the same points since mid-summer.

When measured year over year, traffic has not yet fully recovered since the beginning of the pandemic, when it saw a massive 75% drop. 

But in the week ending on Sept. 6, we saw the biggest closing of that YoY gap since March. 

Interestingly, the leases per property metric was actually ahead of where it was when compared to one year ago. Since the middle of the summer, this metric has been basically the same or slightly ahead of where it was at the same point in 2019.

As we examine the remainder of the summer months, national occupancy and leased percentage rates were down anywhere between 0.1% and 1% YoY. However, broadly speaking, this was a better performance than was expected considering the impact the pandemic has had on every sector of the U.S. and global economies. 

Conversely, national net effective rent has been consistently down about 8% YoY, although certain individual markets have experienced steeper drops – particularly the coastal MSAs.

With the broader context in mind, here are some of the specific takeaways from the week that ended on Sept. 6:

  • Nationally, traffic was down 0.4% WoW and 8.3% YoY. Leases were down 4.8% from the preceding week but up by 6.7% when compared to the same time last year.
  • The national occupancy rate stood at 94.11%. That’s a decrease of 10 basis points from the week before and a drop of 50 basis points YoY.
  • The national leased percentage was 95.23%, down 0.1% WoW and down 0.2% YoY.
  • At $1,649, the national NER declined by 0.3% from the week before. The YoY decrease was 8.4%.

Rent & Trend Report: August 9th
Apartment Market Showing Slight Dips in Operating Statistics

With the coronavirus pandemic continuing to rage in many parts of the country, the week ending on Aug. 9 showed most of the major apartment metrics experiencing slight declines, according to Radix data.

For example, the average apartment community in the U.S. had a traffic number of 9.37 leads, down from 9.54 leads during the preceding week. Also, the average property signed 3.24 new leases, a dip from 3.43 new leases the week before.

Meanwhile, the national occupancy and leased percentage rates were essentially flat on a week-over-week basis, while the metrics’ year-over-year deficits continue to shrink.

Unfortunately, while the national net effective rent was also slightly down WoW, its YoY gap is growing.

Here are some of the specific numbers from the week of Aug. 9:

  • Nationally, traffic and leases were down WoW by 2.4% and 4.7%, respectively. 
  • Traffic was down 15.7% compared to the same time last year; that marked its lowest YoY gap since the pandemic hit in mid-March. 
  • Five metropolitan statistical areas – Orlando, Fla., Portland, Ore., San Diego, San Jose, Calif., and Seattle – had higher YoY traffic numbers. 
  • On a national basis, leases were up 2.9% YoY.
  • The national occupancy and leased percentage rates stood at 93.95% and 95.31%, respectively. 
  • Occupancy was unchanged from the preceding week, while leased percentage was down just a sliver – 0.1% – WoW. Both metrics also were down when compared to the same time last year – occupancy by 0.6% and leased percentage by 0.4%. 
  • Five MSAs showed YoY improvements in occupancy rates, with Riverside, Calif., leading the way with a 1.6% increase.
  • At $1,665, the national NER dipped just O.1% from the week before, but the number was down 8.1% from the same time in 2019. Of some concern, NER’s YoY gap continues to grow. 
  • As for individual markets, three MSAs saw YoY improvements in NER. Phoenix saw the biggest jump, with an annual increase of 1.8%.

Rent & Trend Report: July 19th
Week of July 19 Brings Welcome Improvement in Multifamily Market

That’s more like it.

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.

Radix Weekly Data Report – July 12th
Apartment Market Recovery Hits a Bump in the Road

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%).

How Covid-19 is Impacting Tenant Interest in Phoenix Apartments

By Angela Gonzales  – Senior Reporter, Phoenix Business Journal Jul 9, 2020, 1:34pm MST

Tenant traffic at metro Phoenix apartments has steadily improved since the beginning of April, according to a new report from Radix, a Scottsdale-based data research firm that tracks apartment activity nationwide.

Radix Weekly Data Report – June 24th
Both Traffic and Leases Are Showing Signs of Improvement

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%).

Radix Weekly Data Report – June 17th
Leading Indicators Continue to Improve from Pandemic Impact

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%).

Radix Weekly Data Report – June 10th

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.

Radix Weekly Data Report – June 3rd

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%).

Radix Weekly Data Report – May 13th

Traffic and Leases Move Up From Pandemic Low

It’s been two months since the initial lockdowns started across the country. This week, we saw a number of other states start to open up, and our industry is showing some positive signs in terms of some leading indicators.

On a national basis, both traffic and leases were up during the week ending on May 13, according to data from Radix. Specifically, traffic and leases were up 8.7% and 6.6%, respectively, week over week. They were down 41.7% and 18.2%, respectively, year over year. On the plus side, the YoY deficits for these two metrics have been dropping in recent weeks. For example, leases were down more than 50% on a YoY basis just four to five weeks ago.

Nationally, the occupancy rate dipped 11 basis points to 92.85% during the seven days ending on May 13 (it was down 139 basis points YoY). However, that was the smallest WoW decline since the start of April.

The accordion effect of these leading indicators is now showing signs of more significantly impacting net effective rent (NER).

In the week of May 13, we saw the largest WoW drop in NER – 1.1% – since the pandemic began. And, for the first time since the coronavirus came to the U.S., we saw the YoY comparison dip into negative territory at -0.8%.

What could all this mean?

We could be seeing the first signs of demand stabilization as leading indicators are improving and stabilizing.

The slow but constant gains in traffic and leasing are encouraging and we are making up for the huge deficits we saw when the lockdowns started. Occupancy and leased percentage are, for now, also showing signs of slowing decline.

If this trend continues, operators might not see the need to be as aggressive with concessions and price decreases, thus stabilizing NER. But macroeconomics will play the key role, and for now we are seeing few signs of slowing job loss, which undoubtedly will have a negative impact.

Data from the week of May 13 revealed two other notable takeaways:

  • Four metropolitan statistical areas (Chicago, Las Vegas, Orlando and Tampa) experienced slight WoW increases in occupancy.
  • Over half of the 21 MSAs tracked by Radix showed positive WoW leased percentage trends.