January 6, 2016
Early Q42015 national multifamily figures released by Axiometrics Inc. and Reis Inc. reported high occupancy rates and moderate rent growth numbers across the multifamily sector.
• Reis reported a vacancy rate of 4.4 percent (95.6-percent occupancy). This represented an increase from the 4.3-percent vacancy reported both in 3Q15 and 4Q14 (95.7-percent occupancy).
• Axiometrics’ 95.0% was below the 95.3% reported in 3Q15, but higher than the 94.9% number from 4Q14.
Though high occupancy shows continued demand for apartments, Ryan Severino, Reis’ senior economist and director of research, said more units are being delivered to the markets. As such, “The national vacancy rate should drift higher over the coming years,” he said.
• Axiometrics’ annual effective rent growth nationally was 4.7 percent, a very slight increase from the 4.7% (rounded to the 100th place) in 4Q14. The metric was lower than the 5.2 percent reported in 3Q15. Meanwhile, Axiometrics’ quarter-over-quarter rent-growth was -0.6 percent.
• Reis, in the meantime, reported a 4Q15 annual effective rent growth of 4.6 percent, above the 3.9 percent from 4Q14. Rent growth increased by 0.8 percent from 3Q15, a slight decrease from the beginning of 2015.
Even though Axiometrics’ figures demonstrated a decline quarter over quarter and only a very modest increase from the year before, “Quarters first through third (of 2015) were the most robust period we have seen since before the Great Recession,” noted Jay Denton, Axiometrics’ senior vice president of analytics. Denton added that rent-growth decline was due, in part, to moderating markets in the West.
Seasonality is also an issue, as not many people move during the holidays. Said Severino: “The slight pullback in rent growth during the fourth quarter is more of a testament to how strong rent growth was during those two middle quarters, than any weakness exhibited during the fourth quarter,” he said.