2019 First Quarter Multifamily Rent Report
Vacancy Rates Remain Unchanged
Apartment vacancy rates for the first quarter of 2019 were 4.8% according to a recent report from REIS. While this number remains unchanged from the fourth quarter of 2018, it increased 0.1% year over year. First quarter vacancy rates also increased from 4.3% in the first quarter of 2017 to 4.7% in the first quarter of 2018.
At the same time, only 15 major metropolitan areas saw vacancy rates increase in the first quarter of the year. The most affected cities included Charleston, SC, Orlando, FL, Denver, CO, and Austin, TX. This is an overall positive trend, as 40 cities had vacancy rate increases in the first quarter of 2018. Two cities that saw the biggest declines in vacancy rates include Tulsa, OK and Palm Beach, FL.
Average Asking & Effective Rent Increases
While vacancy rates increased slightly in the first quarter of the year, both the average asking and effective rents rose significantly. Year over year asking rents increased by 4.4% while year over year effective rents rose 4.2%. Both the asking and effective rents grew 0.5% in the first quarter of the year which actually represents a slow down in growth. This is because asking and effective rents rose 0.9% in the fourth quarter of 2018.
Net Absorption and New Construction Supply Decrease
While asking and effective rents increased in the first quarter of the year, overall net absorption of multifamily units declined in comparison to both the first and fourth quarter of 2018. According to the report, this is a very normal trend. Net absorption in the first quarter of 2019 was 37,159 units which is a decrease of over 10,000 units from the first quarter of 2018.
At the same time, construction of new units also decreased by almost 40% on a year over year basis in the first quarter. In the first quarter of 2018 56,018 units were delivered while only 33,276 units were delivered in the first quarter of 2019. Overall, experts predict this trend will correct throughout the course of the year and new unit deliveries will exceed 2018’s total of 254,000 units.
Click here to read a full break down of the 2019 First Quarter Multifamily Rent Report from Multifamily Executive.