- Average rents for U.S. apartments posted one of the weakest fourth quarters since the end of the recession, falling into negative territory after posting strong growth through the first half of the year in 2015.
- Per CoStar Group’s same-store analysis of more than 50 million rent observations, U.S. apartment rents grew at an annualized rate of 9.4% over the first six months of 2015. The growth rate slowed to just 2.7% in the second half of the year, and declined in the final quarter of 2015.
- Many of the nation’s largest apartment markets experienced rent declines in the fourth quarter, most notably in San Francisco (down 1.7%); Washington, DC (down 1.1%); Houston (down 0.5%); Philadelphia (down 0.3%); Seattle (down 0.2%), and Chicago (down 0.2%).
WASHINGTON, Jan. 07, 2016 (GLOBE NEWSWIRE) — According to the latest analysis of the U.S. multifamily market by CoStar Group, Inc. (NASDAQ:CSGP), U.S. apartment rents posted one of the weakest fourth quarters since the end of the most recent recession.
In the first six months of 2015, U.S. apartment rents grew at an annualized rate of 9.4%, per CoStar’s same-store analysis of more than 50 million rent observations. The growth rate slowed to just 2.7% in the second half of 2015, and turned negative over the final three months of the year. Taken together, U.S. apartment rents grew by an average of 6% in 2015.
“Our latest analysis confirms the historically strong growth in apartment rents over the first half of the year has given way to one of the weakest fourth quarters on record,” said Andrew Florance, founder and CEO of the CoStar Group. “We’ve always observed seasonality in apartment rents, but the downturn over the last three months of the year is certainly a noteworthy occurrence and one that would not be apparent in a year-over-year comparison. While it may be too soon to declare this a trend, it certainly bears watching.”
A chart is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/c93f9b13-0af8-44b2-9a08-ecb98be21f26
Several of the nation’s largest apartment markets, many of which have seen record levels of construction and rent growth far outpacing income gains, experienced rent declines during the fourth quarter of 2015. Most notably, San Francisco (down 1.7%); Washington, DC (down 1.1%); Houston (down 0.5%); Philadelphia (down 0.3%); Seattle (down 0.2%), and Chicago (down 0.2%) all posted fourth quarter apartment rent declines. Other high-growth markets, such as San Jose (down 2.7%) and Denver (down 1.0%), also saw average apartment rents decline.
A chart is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/a17ba27c-0b5c-4bed-8801-f3483a06069a
According to CoStar’s analysis, newer, higher quality apartment properties, much of them built since 2010, bore the brunt of the fourth-quarter rent decline, falling by an average of 0.6%. Mid-quality, 3-Star apartment assets saw apartment rents decline by an average of 0.2% in the fourth quarter of 2015, while 1- and 2-Star assets continued to post strong average rent growth of 0.4% for the fourth quarter.
About CoStar Group
CoStar Group, Inc. (CSGP) is the leading provider of commercial real estate information, analytics and online marketplaces. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. LoopNet is the most heavily trafficked commercial real estate marketplace online with more than 10.0 million registered members. Apartments.com, ApartmentFinder.com and ApartmentHomeLiving.com currently form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. Through an exclusive partnership with Move, a subsidiary of News Corp (NWS) (NWSA) (NWS) (ASX:NWSLV), Apartments.com is the exclusive provider of apartment community listings across Move’s family of websites, which include realtor.com®, doorsteps.com and move.com. CoStar Group operates websites with over 23.7 million unique monthly visitors in aggregate as of September 2015. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe and Toronto with a staff of approximately 2,850 worldwide, including the industry’s largest professional research organization. For more information, visit www.costargroup.com.
This news release includes “forward-looking statements” including, without limitation, statements regarding CoStar’s expectations, beliefs, intentions or strategies regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that any trend represented or implied in the release will not continue or produce the results suggested by such trend. More information about potential factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to, those stated in CoStar’s filings from time to time with the Securities and Exchange Commission, including in CoStar’s Annual Report on Form 10-K for the year ended December 31, 2014, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar’s other filings with the SEC available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update such statements, whether as a result of new information, future events or otherwise.
Becky CarrChief Marketing Officer(202) 312-8455 (email@example.com) John AffleckResearch Strategist(617) 443-3168 (firstname.lastname@example.org)Investors: Richard SimonelliVice President Investor Relations(202) 346-6394 (email@example.com)