Rent isn’t just rising: It’s shooting up at the fastest pace in years, according to new nationwide data.
Axiometrics, which tracks apartment rent, said the average annual rent was up 4.7 percent in the fourth quarter of 2015 nationwide, at $1,244.
“Rent growth has been 4.7% or above for five straight quarters,” wrote Axiometrics. “Never in Axiometrics’ 20-year history has annual effective rent growth been at 4.7% or above for such a long period.”
The reasons are pretty straightforward: Apartment supply hasn’t kept up with demand, meaning there are a lot of people jockeying to get into the same apartments. Nationwide, occupancy was at 95 percent in the fourth quarter, the highest fourth quarter occupancy rate since 2000. That means only 5 percent of apartments were on the market – a very tight supply.
That gives landlords leverage to raise rents. And although there’s a record apartment-building boom going on, most of the construction is for upscale, high-rent apartments that aren’t driving down prices when they open.
So, what is the rent picture like in some markets outside of Charlotte? In many places, it’s rising even faster:
▪ Average rents grew 12 percent in Portland and 11.3 percent in Oakland, the fastest increases in the nation.
▪ Oklahoma City was the only market in the top 50 to see average rent fall in the fourth quarter, with a 0.6 percent decline.
▪ Charlotte came in as the market with the 24th fastest rent growth, at 5.6 percent in the fourth quarter. That’s tied with Charleston, where rents also jumped 5.6 percent.
▪ The last time apartment occupancy was higher in the fourth quarter than it was this year was in 2000, when it reached 95.9 percent.