DALLAS (AXIOMETRICS) – The San Francisco-Redwood City-South San Francisco Metropolitan Division’s annual effective rent growth climbed back into double digits during July. The metric had been in single digits since April 2015, according to Axiometrics, the leader in apartment and student housing market research and analysis.
Rent growth in and around the San Francisco metro was 11.0%, 151 basis points (bps) higher than the 9.5% reported in June and 486 bps above the 6.1% from July 2014.
San Francisco-Redwood City-South San Francisco
Additional information of note about the metro:
- The average rent per unit was $3,284.
- As rent growth spiked, occupancy remained relatively flat. The metro’s 96.5% occupancy rate was the same as July 2014 and was 10 bps higher than June’s 96.4%.
“We had been seeing a downward trend in rent growth and occupancy in the San Francisco area, due to increasing supply and the high level of rental rates,” said Stephanie McCleskey, Axiometrics’ Vice President, Research. “Now, we’re seeing continued annual job growth at 4%-plus. This could be why we’re seeing rent growth starting to move up once again.”
San Jose-Sunnyvale-Santa Clara Metropolitan Statistical Are
- Occupancy for the San Jose metro in July was 96.2%, a 60-bps decline from June’s 96.8%, and 70 bps below the 96.9% from July 2014.
- Annual effective rent growth during the same period was 10.4%, representing a 3-bps decrease from June’s 10.5%, but a 146-bps increase from the July 2014 rate of 9%.
- Renters paid an average of $2,827 per unit.
Oakland-Hayward-Berkeley Metropolitan Division
- Occupancy in the Oakland metro continued a slow slide, ending up at 96.1% in July. This metric represented a 40-bps fall from June’s 96.5%, and a 60-bps drop from the 96.7% reported in July 2014.
- Annual effective rent growth was 14.5%, a 3-bps increase from the 14.4% reported in June, and a 424-bps increase from the 10.2% from July 2014.
Apartment Markets Remain Robust, Year over Year
“There have been slight ups and downs in the Bay Area through much of the past year, but nothing of significance,” McCleskey said, adding that in July 2015, occupancy in all three metros topped 96%, while rent growth was well above the national average.
“We’re still seeing full markets and consistently high rent growth in the Bay Area cities,” McCleskey said. In fact, among Axiometrics’ Top 50 markets, as determined by unit number, Oakland topped the list for effective rent growth, while San Francisco and San Jose came in third and fourth, respectively. The Bay Area submarkets are also doing quite well, according to Axiometrics apartment research.
“We keep repeating ourselves with this statement, but as long as the high-tech companies keep hiring at their current pace, high demand for apartments will continue,” McCleskey said.
by Ross Coulter
Axiometrics’ specialty is monitoring the apartment and student housing markets, providing an in-depth view of volatile market trends. Axiometrics’ granular data-collection methods and enlightening analysis help clients make profitable – and intelligent – decisions. To learn more visit www.axiometrics.com, follow @Axiometrics or on LinkedIn, or call 214-953-2242.