Though annual rent growth slowed mildly during the third quarter, the fact that effective rents still rose from a year earlier may signal the apartment sector is still as strong as ever.
According to Axiometrics Inc., revenue growth, which combines the effective rent and occupancy growth into one number, measured 1.05% from the beginning to the end of the third quarter, as compared to 1.08% over the same period in 2011.
“The question going forward is how the apartment market will perform as new supply continues to enter the market at an increasing pace,” said Jay Denton, vice president of research for Axiometrics. “The delivery number will continue to escalate for the foreseeable future as it climbs back to the relatively stable level the apartment market experienced from 1999 to 2008.”
Denton added that two significant factors affecting rent growth are seasonal rental patterns as well as the impact from new lease-ups.
More lease documents may be signed for single-family properties, as the inventory for such homes available to rent is increasing nationwide, thanks in part to the government’s real estate-owned investor program.