More first quarter rental data reveals the short-lived renters' revolt and an apartment oversupply depressed apartment occupancy rates late last year, but that one-two punch wasn't enough to knock out rising rents.
From year-over-year average rent hikes of 0.4 percent in Boise, ID, to 12.2 percent in San Jose, CA, all but one of the 29 metro markets tracked by Novato, CA-based RealFacts.com enjoyed annual rent increases.
The only exception was Colorado Springs, CO, where rents dropped an average 1.7 percent.
"Annual rent growth was almost uniformly up. The highest average monthly rent was in Los Angeles (CA) at $1,588, the lowest in Tulsa (OK) at $538, and Seattle became the first MSA (Metropolitan Statistical Area) outside California to post average monthly rent over $1,000 at $1,004," according to RealFacts.com.
RealFacts keeps tabs on more than 12,000 rental communities of 100 units or more in 15 states, most of them west of the Mississippi River, but also Florida and Illinois.
The firm also keeps tabs on rental units by category, from studios, one-, two- and three-bedroom apartments to three- and four-bedroom town homes.
In the hottest rent increase market of San Jose, CA, for instance, the greatest year-over-year average rent hike, 17.1 percent came from the studio category, followed by the 13.7 percent increase in one-bedroom, one-bath units and 12.7 percent in the junior one-bedroom units.
The nearly across-the-board rent increases in the data base came even as 12 of the 29 metros revealed year-over-year slips in occupancy rates.
The quarter-to-quarter occupancy rates revealed a stronger growth trend.
"Occupancy was mixed with 17 MSAs reporting quarterly increases, 11 decreases, and one showing no change. These results are a notable change from last quarter’s occupancy declines in every MSA," RealFacts reported.
The rental market tracker said all 29 metros reported over 90 percent occupancy for the first quarter, with seven markets over 95 percent, 17 between 92 percent and 95 percent and five markets below 92 percent.
Houston had the lowest occupancy rate at 90.6 percent and San Jose, boosted by the improving tech-based Silicon Valley economy, had both the largest rent increase and occupancy rate at 96.5 percent.
A month ago, larger apartment market analyst Marcus & Millichap projected in its 2007 National Apartment Report, that by year's end, vacancy rates should improve 20 basis points to 5.1 percent (putting occupancy rate at nearly 90 percent nationwide), compared with a decline of 40 basis points in 2006. Rents should rise by 4.8 percent.
The nation's apartment market got a boost beginning in 2005 as the high-flying owner-occupied housing market boom faded forcing shelter seekers into more affordable rentals. By 2006 rental rates were taking off.
Just as quickly, the rise in rents leveled off in late 2006 as renter-backlash to fast rising rents and condos coming to market as rentals combined to saturate the apartment market with inventory, according to reports from a variety of rental market monitors.
After the high-rent district of Los Angeles, the highest average rents were all posted in California -- Oxnard-Thousand Oaks-Ventura; San Jose-Sunnyvale-Santa Clara; San Francisco-Oakland-Fremont; and San Diego-Carlsbad-San Marcos -- all of which posted average rents of greater than $1,325 a month, according to RealFacts.com.
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