April 2013 Apartment Market Summary via Axiometrics

As 2Q 2013 began, national effective rent growth softened to its slowest pace in the past 32 months. The growth rate had held fairly steady between 3.53% and 3.84% from June 2012 to February 2013, slowed to 3.22% in March 2013, and declined to a low of 3.11% in April 2013. While effective rent growth was weaker than in prior periods, the occupancy rate continued to strengthen, with a national average of 94.60% in April and with 44 of the top 88 Metropolitan Statistical Areas (MSAs) generating an average rate above 95.0%.

Class A properties continue to be a drag on national rent growth. Annual effective rent growth for these properties slowed to 2.8% in April though occupancy increased from 95.0% in March to 95.12% in April. There was very little separation between Class A occupancy (95.13%) and Class B occupancy (94.96%) in April. However, Class B properties increased effective rents at a slightly better pace–3.2%–than Class A properties over the past year, but fell behind Class C properties, which produced a growth rate of 4.0%. Class C properties also have the best absorption rates, and this trend will likely continue as the occupancy rate still averages just 93.2%.

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