On a national basis, rents and occupancies have fallen. Carrollton, Texas-based M/PF Research says occupancies have fallen 30 basis points, while rents fell a percentage nationally. Meanwhile, Novato, Calif.-based research firm RealFacts says occupancies nationally have fallen from 92.2 percent to 91.4 percent.
On a market-by-market basis, the picture isn’t much brighter. RealFacts says rents only rose in the first quarter of ’09 in three markets: Houston by 0.8 percent; Oklahoma City by 0.3 percent; and Vallejo-Fairfield, Calif., by 0.2 percent. M/PF reports that Washington, D.C., is the only market that saw occupancy and rents rise.
Here’s a look at specific markets industry watchers seem to think are surviving—and struggling.
WASHINGTON, D.C.: With the stability of the federal government, it’s safe to say that no other market can compare to the nation’s capital right now. The metro was the only market to post gains in both rents and occupancies in the first quarter of 2009. “D.C. pretty much stands alone,” says Greg Willett, M/PF’s vice president of research and analysis. Still, Marcus & Millichap reports that total employment is falling for the first time since 2001. Therefore, research and brokerage firms forecast vacancies to rise 100 basis points to 6.4 percent in 2009, while asking rents will likely decline 0.3 percent to $1,360 per month this year.
Bottom line: Surviving
CALIFORNIA: Yes, this entire state is having trouble. With Los Angeles rents falling 5.7 percent, San Francisco rents falling 5.2 percent, San Jose rents dropping 4.9 percent, and
Orange County’s rents sliding 4.3 percent, California may have some of the worst markets in the country, according to
M/PF. California has seen massive job losses and a staggering amount of foreclosures. But now, there are signs people are purchasing those foreclosures.
Bottom line: Still struggling
OKLAHOMA CITY: The place that added the most jobs in 2008? According to Willett, it was Oklahoma City, which added 2,100 jobs in the year that ended in February. RealFacts says average occupancy in the city was at 93 percent, up 2.8 percent from 2008. Average rents moved to $610 per month, up 2.9 percent from the year before. Since February, however, the city has lost 3,000 jobs. “Even with the overall number going negative, there’s still decent growth in energy, health care, and government,” Willett says.
Bottom line: Surviving
PHOENIX AND LAS VEGAS: It’s almost too easy to put these cities on a worst rental markets list. Yet their first-quarter numbers from RealFacts show they still belong. In the first quarter, Phoenix metro area rents fell 1.9 percent to $777, while occupancy levels fell 0.5 percent to 88.2 percent. In Las Vegas, rents fell 1.4 percent to $866, while occupancy levels dropped 1.1 percent, coming in at 91 percent.
Bottom line: Still struggling
SAN ANTONIO: Dallas and Houston have stayed relatively healthy, but Willett thinks San Antonio could be the best bet in Texas. Right now, it has flat employment, but the Department of Defense is expected to pump 10,000 new jobs into medical facilities at Brooke Army Medical Center and Fort Sam Houston. There isn’t much supply coming into the market, either, and the apartments that have delivered have done fairly well.
Bottom line: Watch it
