By Ashley Fletcher Frampton
aframpton@scbiznews.com
Published Sept. 28, 2010

Apartment vacancy in the Charleston area has fallen below 10% for the first time in more than two years, according to a new market report by Charlotte-based Real Data.

The area’s vacancy rate was 9.8%, based on August data.

Also in August, rental rates at existing apartments increased 3.1%, the first gain in 18 months, according to the report.

A rendering of West Yard Lofts by Martin Riley Associates, architects.

Real Data publishes a report on apartment market conditions in the Charleston area twice a year, based on data from February and August.

For the past two years, the firm’s research has shown vacancy rates intermittently rising and falling, but consistently above levels seen over the past 10 years. The weak market has been driven by an economy that faltered as thousands of new units were in the works and coming online.

In February, the vacancy rate was 13.7%, up from 11.1% one year ago. The highest vacancy rate in the report’s history, which was 15.3%, came in February 2009.

The last time vacancy was under 10% was February 2008, when area apartments were 9.6% vacant.

The slowdown in apartment development has helped the vacancy rate stabilize, the Real Data report said. Only 32 units were completed over the last six months.

At the time of Real Data’s last report in February, 561 units had been added to the market. Since August 2008, a total of 3,258 units have been added.

The only current apartment construction in the area is the 60-unit West Yard Lofts project at the Navy Yard at Noisette in North Charleston. The apartments, developed as affordable housing, are expected to be finished by the year’s end.

“Occupancy rates should continue to improve due to the lack of new supply,” the report said. “Rent growth should continue as occupancy rates climb.”

However, 1,811 new units have been proposed in six communities around the region, Real Data reported.

The average monthly apartment rent in Charleston was $772 as of August, up from $747 six months ago, the report said.

August rents were nearly on par with the average two years ago, which at $774 was the highest in the report’s 10-year scope.

Reach Ashley Fletcher Frampton at 843-849-3129.