- Seattle (2.9%)
- Salt Lake City (2.5%)
- Austin (1.8%)
- Albuquerque (1.6%)
- Seattle (11.6%)
- Salt Lake City (10%)
- Austin (7.2%)
- Albuquerque (6.4%)
- Riverside-San Bernardino (0.4%)
- Los Angles-Long Beach-Santa Ana (1.5%)
- Phoenix (0.9%)
- Las Vegas (0.8%).
May 1, 2007
NEW MARKET LEADERS IN QUARTERLY RENT GROWTH
First quarter survey results revealed new market leaders in quarterly rent growth. Unlike the last five to six years, recently each quarter reveals different markets accelerating and decelerating in rent growth, as very few coast with little change. Long time leaders Riverside-San Bernardino and Las Vegas continued decelerating during the first quarter with 0.4% and 0.8% quarterly rent growth respectively, while Seattle and Salt Lake City accelerated rapidly, growing at 2.9% and 2.5%. First quarter 2007 results continue the recent trend of a constantly changing list of market leaders in the rent growth parade.
Of the 29 major MSAs reported on by RealFacts 10 posted accelerated rent growth during the first quarter, 15 decelerated and only 4 coasted. Leading the accelerating MSAs were Seattle (2.9%), Salt Lake City (2.5%), Austin (1.8%) and Albuquerque (1.6%). If these quarterly rates continue the annual rent growth will be 11.6%, 10%, 7.2% and 6.4% respectively. Accelerating markets reported quarterly rent growth greater than one quarter of their current annual rate.
Among decelerating MSAs were previous long-time rent growth leaders Riverside-San Bernardino (0.4%), Los Angles-Long Beach-Santa Ana (1.5%), Phoenix (0.9%) and Las Vegas (0.8%). If these rates continue for a full year, the MSAs will post 1.6%, 6%, 3.6% and 3.2% annual growth, all significantly down from recent increases. Decelerating rapidly were recent growth leaders Oxnard-Ventura (1.3%) and Portland OR (1.0%); down from their previous quarter rates of 2.3% for Oxnard in 4Q06 and 2.7% for Portland in 3Q06. Decelerating markets reported quarterly rent growth of less than one quarter their current annual rate. The four coasting MSAs were Colorado Springs, Fresno, Kansas City and Indianapolis, all with quarterly rent growth within a half a percent of their current annual rate.
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. All MSAs reported over 90% occupancy for the first quarter, with 7 over 95%, 17 between 92 and 95% and 5 below 92%. Houston was the lowest at 90.6% and San Jose was the highest at 96.5%. Salt Lake City was second highest at 96.3% occupancy, and was the only MSA to report gains of at least 1% in both quarterly and annual rent and occupancy growth.
Annual rent growth was almost uniformly up, as only Colorado Springs posted a decrease at - 1.7%. San Jose led the 8 MSAs over 5% annual rent growth at 12.1%. The highest average monthly rent was in Los Angeles at $1,588, the lowest in Tulsa at $538, and Seattle became the first MSA outside California to post average monthly rent over $1,000 at $1,004.
Caroline S. Latham