The occupancy rate in the Albuquerque metro area’s apartment market slid in January to the lowest level in four years, reflecting continued uncertainty about the economy and job picture, according to the latest apartment market survey from CBRE.
While not indicative of a market that’s out of balance, January’s 93.2 percent occupancy rate approached the most recent low of 92.9 percent in January 2010. The average monthly apartment rent has gone down by fractional amounts for the past year, standing at $730 in the January survey, according CBRE data.
On the other hand, fewer apartment properties are offering concessions on rents, 45 percent last month compared to 51 percent in January 2013, reports the three-times-a-year survey by the multifamily team of David Eagle and Billy Eagle at commercial real estate services firm CBRE’s Albuquerque office.
“The outcome was surprising given occupancy and average rent trends,” the survey’s synopsis of findings says.
A comparable apartment survey for the fourth quarter by RealFacts shows a 92.2 percent occupancy rate in the metro, down from 92.5 percent from the end of 2012. The average monthly rent was $770 at year end, down from $772 in the fourth quarter of 2012.
The CBRE and RealFacts surveys generally track together, although their exacting findings vary due to different methodology and databases. RealFacts’ average annual occupancy rate for the metro in 2013 was 92.6 percent, the lowest annual average since at least 2004.
Both the CBRE and RealFacts data paint a picture of a local apartment market that typically functions within a narrow bandwidth of occupancy and rental rates. Apartment markets in other Southwest states tracked by RealFacts show much greater volatility in rates over time.
In the CBRE synopsis, the Eagles say the data suggests apartment renters are more focused on the monthly rental amounts that they’ll pay over the term of their leases than they are on upfront concessions like a month’s free rent.
“This appears to be consistent with near-term concerns about the local economy and employment picture,” the synopsis says. “All in all, this would suggest that the market is stable and waiting for improved economic and employment news.”