DALLAS—Having already declared 2014 to be the “Year of the Apartment,” locally based Axiometrics now says the sector has gone one better, by posting annualized effective rent growth not seen in more than two years.  It's against this backdrop of continued strength, as well as challenges, that the multifamily industry will convene next month in Los Angeles for the annual RealShare Apartments conference, scheduled for Oct. 15 and 16.

Rent growth nationwide was 4.1% in August, the first time the annualized rate broke the 4% barrier since May 2012, Axiometrics says. Although rent growth is not at what the research firm calls “the heady 5% levels of mid-2011,” the national apartment market is now “four years into the sector's recovery from the Great Recession, and there hasn't been any notable deceleration in rent growth.”

In fact, says Axiometrics, August's national growth is only one basis point lower than the figure for May '12, which was also rounded to 4.1%. The last time effective rent growth could be rounded above that mark was in October '11, when it reached 4.4%. 

The good news doesn't stop there. Axiometrics says year-to-date effective rent growth reached 5.5% in August, up 40 bps from July and 35 bps ahead of the 5.2% recorded in August of '11, the next strongest post-recession year.

“YTD rent growth has now surpassed the previous high point for any month of the recovery,” according to Axiometrics. Furthermore, August marked the sixth consecutive month in which the current year has been considered the strongest one for annualized effective rent growth during the recovery period.

Whether '14 ends up as the strongest post-recession year overall will depend on fourth-quarter performance, notes Axiometrics. The firm predicts that the rent growth rate will subside slightly during the last part of the year, but not below the mid-3% range on an annualized, monthly basis.

Occupancy, too, showed renewed strength in August, rising 22 bps to 95.2% after three months at 95.0% flat. It marks the fourth consecutive month of apartment occupancy above 95%.

The high occupancy is “even more phenomenal,” Axiometrics says, when the volume of new supply being delivered nationwide is taken into account. “The continued high occupancy is likely one reason landlords believe they can push rents higher,” the firm says.

In fact, the nationwide occupancy rate posted last month was the highest since Axiometrics began reporting monthly in April 2008, “and this increase continues to demonstrate we aren't one bit concerned about the national market, despite all the new supply. With continued job growth propelling the apartment market and helping to fill new (and even existing) units, we expect the apartment market will continue to post positive and encouraging results.”

The top two metro areas for growth in rents, occupancy and revenue growth are both in Northern California. Oakland topped the list with 11.2% annual effective rent growth, an occupancy rate of 96.8% and Y-O-Y revenue growth of 11.3%.  To Oakland's south, San Jose came in second with rent growth of 10.2%, occupancy of 96.8% and revenue growth of 10.8%. The Bay Area's largest metropolis, San Francisco, came in sixth in Axiometrics' ranking.