Some of the biggest names in the apartment industry reported significant improvement in rents in the first half of 2010. But the question is: How have those numbers improved without significant job growth?
The answer doesn’t lie in unemployment figures. Instead, companies are pointing to a new phenomenon called unbundling (or “decoupling,” depending on who you ask). The theory: Workers (many of those in their 20s) are confident in their jobs, so confident that they felt comfortable leaving their roommates, group homes, or parents’ basements and striking out on their own.
Just look at the numbers. Cleveland-based Associated Estates recently saw its first increases in renewals and new leases in 18 months. In May, the company was more than 96 percent occupied. Highlands Ranch, Colo.-based UDR says market rents improved 4.3 percent since last year, which led to a recovery six to nine months sooner than it expected.
Meanwhile, Memphis-based Mid-America Apartment Communities saw average rents rise 4 percent over the past four months and new customer rents jump 5 percent. Alexandria, Va.-based AvalonBay Communities saw its economic occupancy bump up to 96.6 percent. It attributes the increase to the improving economic environment and continuing problems in the for-sale market; the diminishing supply of new apartments; and, of course, unbundling.