RealPage® MPF Research Division Reports Strong Demand and Accelerating Rent Growth in U.S. Apartment Market During Second

  RealPage® MPF Research Division Reports Strong Demand and Accelerating Rent
  Growth in U.S. Apartment Market During Second Quarter 2013

   Leasing activity soars despite an increase in households opting for home
                          purchase in select markets

Business Wire

CARROLLTON, Texas -- July 2, 2013

A comeback in for-sale housing has not derailed the very strong performances
posted over the past few years in the nation’s apartment sector, according to
MPF Research, an industry-leading market intelligence division of RealPage,
Inc. (NASDAQ: RP). Instead, second quarter apartment demand surged relative to
last year’s level, and the annual rent growth pace accelerated once more,
after having cooled a bit earlier. MPF Research analysts highlight the
nation’s latest apartment demand and rent growth statistics as well as other
key performance indicators in a discussion found at http://goo.gl/xa46e.

Demand for 88,524 apartments registered across the country’s 100 biggest
markets in second quarter. That absorption tally, up 69 percent from the
second quarter 2012 volume, well surpassed the 33,291 apartments in
communities finished during the April-June time frame. “Some of the pent-up
apartment demand from young adults who have been living at home with mom and
dad or in other combined-household situations is being unleashed,” according
to MPF Research vice president Greg Willett. “The number of new apartment
renters entering the market exceeds those exiting to make home purchases.”

Demand running ahead of deliveries in second quarter took the national
apartment occupancy rate to 95.3 percent, up from 94.9 percent in first
quarter 2013 and 95.2 percent as of second quarter 2012. “While a slight
uptick in occupancy during the second quarter is good news, the shifts
recorded over the course of the past couple of years in large part reflect
normal seasonality,” Willett said. “The big-picture story is that the
apartment market has been essentially full since the middle of 2011, and that
it’s continuing to remain full even as we add a significant number of new
rental properties and cycle out some previous apartment residents to home
purchase. We’re adding enough new households for all types of housing to
experience momentum at the same time.”

Effective rents for new leases climbed 1.6 percent during second quarter,
taking the annual pace of increase since mid-2012 to 3.1 percent. Annual rent
growth now is accelerating once again, after it had cooled a bit throughout
2012 and early 2013. The annual increase of 2.6 percent that was seen during
first quarter 2013 ranked as the weakest growth registered since late 2010.
Typical monthly rent across the nation’s 100 largest metros now is at $1,110.

“Rent growth strengthened right in line with the upturn in leasing activity,
despite the fact that many owners and operators had been somewhat cautious in
pushing prices substantially in late 2012 and the first few months of 2013,”
Willett said. “The timing of that rent move, without the delay that sometimes
has been seen in past market cycles, illustrates that more landlords are
making well-informed decisions when executing their strategies. From our
perspective, increasing use of technologies that give owners and operators
real-time insights into what’s happening across their portfolios is starting
to impact the timing of movement in apartment market fundamentals.”

Among large individual metros, San Francisco ranks as the country’s rent
growth leader by a fairly large margin. Pricing there rose 7.8 percent during
the past year, taking average monthly rent to $2,498. Annual rent growth came
in at 6 percent to 6.9 percent in Oakland, Denver-Boulder and Seattle-Tacoma,
and prices climbed 5 percent in San Jose.

Markets registering annual apartment rent growth of 4 percent or a little more
were Portland, Houston, Austin and West Palm Beach. Fort Worth completed the
top 10 list of the nation’s biggest metros with the fastest rent growth: rates
there jumped 3.6 percent.

Metros that just missed the cut-off point for the best-performers list
included Chicago, Raleigh-Durham, Columbus and Miami.

Annual Rent Growth Leaders
2Q 2013
      
                           Annual
                             Rent
Rank     Metro               Growth
1        San Francisco       7.8%
2        Oakland             6.9%
3        Denver-Boulder      6.1%
4        Seattle-Tacoma      6.0%
5        San Jose            5.0%
6        Portland            4.4%
7        Houston             4.3%
8        Austin              4.1%
9        West Palm Beach     4.0%
10       Fort Worth          3.6%
                             

New York, a market that tends to be a regular on the list of annual rent
growth leaders on the metro level, was notably missing from the top-performing
group as of second quarter. New York, in fact, registered slight rent cuts
during the year-ending second quarter, with pricing down 0.6 percent. Still,
New York’s average monthly rents are by far the highest in the country at
$3,269, and its occupancy rate of 97.7 percent is the tightest anywhere.
“There doesn’t appear to be any real underlying weakness in the New York
apartment market,” Willett said. “We’re just getting a brief, minor correction
in rent levels, after owners and operators got perhaps a little too aggressive
when pushing prices throughout 2011 and the first half of 2012.”

Properties totaling 296,669 units were under construction in the nation’s 100
largest metros at the end of second quarter. Ongoing building now has slightly
surpassed the norm of about 275,000 units that was seen from the late 1990s
through 2008, before recession brought the volume to a post-World War II low
by the end of 2010. “Construction activity still looks reasonable relative to
the demand levels anticipated over the next couple of years for the country as
a whole,” Willett said. “There could be some brief overbuilding on a spot
basis, but that’s true anytime the apartment market is hitting its stride in
the expansion phase of the cycle.”

About RealPage

Located in Carrollton, Texas, a suburb of Dallas, RealPage provides on-demand
(also referred to as “Software-as-a-Service” or “SaaS”) products and services
to apartment communities and single family rentals across the United States.
Its on-demand product lines include OneSite® property management systems that
automate the leasing, renting, management and accounting of conventional,
affordable, tax credit, student living, senior living and military housing
properties; LeaseStar™ multichannel managed marketing that enables owners to
originate, syndicate, manage and capture leads more effectively and at less
overall cost; YieldStar® asset optimization systems that enable owners and
managers to optimize rents to achieve the overall highest yield, or
combination of rent and occupancy, at each property; Velocity™ billing and
utility management services that increase collections and reduce
delinquencies; LeasingDesk® risk mitigation systems that are designed to
reduce a community’s exposure to risk and liability; OpsTechnology® spend
management systems that help owners manage and control operating expenses; and
Compliance Depot™ vendor management and qualification services to assist a
community in managing its compliance vendor program. Supporting this family of
SaaS products is a suite of shared cloud services including electronic
payments, document management, decision support and learning. RealPage’s
MyNewPlace® subsidiary is one of the largest lead generation apartment and
home rental websites, offering apartment owners and managers qualified,
prospective residents through subscription, pay-per-lead and LeaseMatch^TM
pay-per-lease programs. Through its Propertyware subsidiary, RealPage also
provides software and services to single-family rentals and low density,
centrally-managed multifamily housing. For more information, call
1-87-REALPAGE or visit www.realpage.com.

Photos/Multimedia Gallery Available:
http://www.businesswire.com/multimedia/home/20130702006147/en/

Multimedia
Available:http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50663927&lang=en

Contact:

RealPage, Inc.
Media
Greg Willett, 972-820-3262
greg.willett@realpage.com
or
Investor Relations
Rhett Butler, 972-820-3773
rhett.butler@realpage.com
 
Press spacebar to pause and continue. Press esc to stop.