Occupancy Growth Not Leading to Rent Hikes, Yet

NOVATO, CA-Despite gradually rising demand, apartment rents continue to tick down. Realfacts, a locally based multifamily research firm, reports that renters are slowly returning to the market, providing a boost to many landlords’ occupancy figures. But unfortunately for apartment owners, that’s not translating into rent growth just yet, thanks to the current economic malaise in the market.

In fact, on a national basis, average rental rates declined by 3.7% between the third quarters of 2008 and 2009, falling from an average charge of $1,002 per month a year ago to $968 by midyear 2009, to $965 a month as of the end of September.

Only seven of the 33 markets Realfacts examined posted rental rate increases, and even those were minimal. The Miami-Ft Lauderdale, FL-area saw a 1% gain from the second quarter’s $1,163 per month to $1,175 in the third. Austin, TX saw the second-largest jump, rising 80 basis points–$845 a month in Q2 to $852 in Q3. Rounding out the top four are Albuquerque, up 0.7% from $732 to $737 between the second and third quarters, and Portland, OR, which saw average monthly rental rates go from $842 to $846, accounting for a 0.6% increase.