A. Lee Graham lgraham@bizpress.net
Fort Worth apartment rents surged last year as rising rates nationwide also showed no signs of slowing, according to local analysts and a new report by MPF Research, a market intelligence division of Carrollton-based RealPage Inc. The growth rates for apartment rents nationwide reached 4.7 percent during 2014, according to the report. In the past two decades, similar growth during the final three months of the year occurred just once: in 2005, according to MPF findings. “This market cycle for the apartment industry looks like a record-setter in terms of both total revenue growth and the duration of the strong increases,” said Greg Willett, vice president of MPF Research, commenting in a news release. “The pace of rent growth normally slows after the first couple of years in a cycle, once additional new supply comes on stream, but demand is rising right along with deliveries this time,” Willett said.
Average apartment rents in Dallas-Fort Worth grew by 4.9 percent, surpassing the nationwide figure of 4.7 percent, according to the report. Average monthly apartment rent in Dallas-Fort Worth was $919. Some 246,579 apartments were completed in the nation’s 100 largest metro areas during 2014, marking a 14-year high. Ongoing apartment construction in the top 100 metro areas reached 405,886 units. Of those, 290,145 units are expected to be finished during 2015, according to the report. Underlying demand suggests that in 2015 the capacity to absorb apartment units should roughly align with expected deliveries, or units placed on the market for rent. “The momentum in job creation that emerged during 2014 looks sustainable in 2015, pointing to significant new household formation and sizable apartment demand,” Willett said. Another analyst agreed
“This has been one of the best job growth markets in the country,” said Ross Coulter of MPD Ventures Co., representing Axiometrics Inc., a Dallas-based apartment market research and analysis firm. Job opportunities appear to be fueling apartment inventory and pushing up rates, and Fort Worth appears particularly enticing to prospective renters, Coulter said. “Rents do tend to be a little more affordable on the Fort Worth side of town, about $120 less than the Dallas average,” said Coulter, calling ongoing job growth “the biggest draw” for Fort Worth apartments. Nationally, rent growth of 3.5 percent to 4 percent appears likely in 2015, according to MPF findings. “While occupancy should continue to be tight, apartment owners and operators may have to be a little more conservative in their pricing strategies over the coming year in order to capture available demand,” Willett said. On the metro level, the San Francisco Bay area and Denver remained the country’s leaders in rent growth during 2014. Effective rents for new leases rose 11.5 percent in Oakland, 10.5 percent in San Jose, 9.8 percent in San Francisco and 9.7 percent in Denver-Boulder. At the next tier of performance, annual effective rent growth registered at 6.8 percent in Atlanta, 6.7 percent in Portland, Ore., 6.7 percent in San Diego, 6.5 percent in West Palm Beach, 6.3 percent in Los Angeles and 6.1 percent in Seattle-Tacoma. RealPage Inc. provides property-management software solutions for the multifamily, commercial, single-family and vacation rental housing industries.