By Ashley Fletcher Frampton
Published March 30, 2010
Apartment vacancy in Charleston was at 13.7% in February, according to a new report from Charlotte-based research firm Real Data.
The rate is lower than the 15.3% vacancy reported one year ago, which was the highest in the firm’s data for the last 10 years. But the latest vacancy rate, released this month, is up from 11.1% in August.
Real Data publishes semi-annual market reports for Charleston, capturing trends in August and February each year.
High unemployment and the loss of nearly 10,000 jobs over the last year are contributors to weak demand, the report said.
The local supply of apartments has continued to rise over the past few years, even in the last 12 months. According to the Real Data figures for February, the total number of units rose about 5% from a year ago.
But now, new apartment development has nearly stopped, with only 40 units now under construction and none started in the last year, the report said.
About 2,000 units are proposed in the region, but developers are waiting for lending and economic conditions to improve, and the slowdown in construction will help the market absorb extra supply.
Average “same-store” rent fell slightly to $747 from the year-ago average of $754 and from $451 in August. The area’s 10-year high for rent was reported in August 2008, when rates averaged $774.
The Real Data report found that 64% of apartment communities in the Charleston area were offering rent concessions in February.
Newer apartments posted better vacancy rates than older communities. The average vacancy rate for apartments between one and five years old was about 8.2%.
The report forecasts that overall occupancy could rebound this summer, and vacancy rates could be back down to 10% by the year’s end. Communities are expected to continuing offering concessions, according to Real Data, and rental rates will remain flat until the economy recovers.
The report said that falling home prices and mortgage rates have moved the cost of homeownership closer to the cost of renting than it has been in about 10 years.