Caroline Latham of RealFacts.com has published her quarterly newsletter again and has more interesting stats on the rental market.
Since I am new to this industry and still have a lot to learn, it is always interesting for me to read what she has to say – for instance:
“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.”
I am not sure what MSA’s are, but I think she is referring to Metropolitan Statistical Areas. It appears that RealFacts just surveys multifamily housing units that are greater than 100 units. Since my site is more about single family homes and small unit rentals like condos and duplexes, these number may not apply to the market I concentrate on.
But, on the other hand, perhaps these numbers apply to the small unit rental market – I just don’t know yet since I am pretty green in this area. Perhaps if anyone wants to comment and let me know, that would be great. I think it is interesting that the Colorado Springs rental growth is decreasing – I wouldn’t have guessed that.
“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.”
Vacancy rate always fascinates me. From what I have learned so far, there seems to be a direct correlation between vacancy rate and ad dollars spent. For instance in the quote above, the Houston market should have a lot of property managers spending tons of money on advertising. However, in San Jose all the property managers need to do is whisper to a friend that a rental is coming available and it will be rented in 4 hours.
Am I on the right track here? I would love to hear comments.
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Rents are starting to increase in the Pierce County area (south of Seattle and King County), but I wouldn’t characterize market up-tick as overly strong just yet. The area seems ripe for rent increases and lower occupancy which bodes for greener pastures coming into the summer months. I appreciate your coverage of the industry and thanks for keeping this blog running. Cheers!
In 2006, our local chapter of NARPM created a vacancy survey for single family homes and multi-family 2-15 units. In Boise, there is already a vacancy report for multi-family >16 units. It has been very well received by the media and NARPM members, not to mention investors. Vacancy in Boise is at record lows and rents are creeping up slowly but surely. Single family vacancy really is a different animal than multi-family and should be recorded separately.
With regards to advertising in a hot market, my company has switched to online advertising only as it is more cost effective and reaches so many more people! The newspaper costs twice as much to advertise a mere 3 lines of black and white print with no photos – and that’s only for Saturdays and Sundays! I’ll have to try the whisper thing as that’s the way Boise seems to be heading! Great blog – thanks!