The last shall be first, according to the latest August apartment markets report from Axiometrics Inc. The multifamily research firm finds that effective rents for new leases at class-C apartment properties grew faster on average than at class-A and class-B properties.
“We call it the filling in effect,” says Jay Denton, vice president of research of Axiometrics. “Now that occupancies are getting better, class-Cs are getting some pricing power.”
Overall, apartment rents continue to grow more slowly in the third quarter of 2012. Nationwide, apartment rents grew 3.7 percent on average over the last 12 months, down from 4.0 percent in the second quarter. “For five consecutive quarters the annual rate of growth—while still positive—has slowed,” according to Axiometrics. Average rent growth peaked at 5.1 percent in the second quarter of 2011. Axiometrics has now lowered its 2012 full-year forecast for effective rent growth to 3.6 percent, though it expects the rate to bounce back in 2013 because of improving job growth and renter household formation.
Read more...Class-C Apartments Strengthen
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