Monday, November 18, 2013

The Momentum Continues in the Jacksonville Apartment Market


The previously discussed momentum in the Jacksonville apartment market continued through the third quarter of 2013 according to data from REIS.

Vacancies remained steady at 6.8% for the third quarter in a row. There was a net absorption of 316 units, even with 350 units of newly completed Class A construction hitting the market. In this competitive situation, landlords were still able to raise both asking and effective rents 1.2% from 2013Q2 levels to $837 and $805 respectively. Class A properties enjoyed a 100 BPS occupancy advantage over their B/C brethren with vacancies running 6.2% and 7.2% respectively. They also enjoyed an advantage in asking rent increases, with Class A properties achieving 1.4% growth versus 0.9% for the B/C properties, to average asking rents of $1,023 and $693 respectively. However, the increasing Class A rents appear to be motivating some renters to accept Class B/C properties as the vacancy rate for the Class A properties increased by 30 BPS versus a 30 BPS decline for the Class B/C properties during 2013Q3.

The driver for this momentum continues to be employment growth. Employment increased 0.85% during 2013Q3 with a resulting 1.46% increase in average household income. Household income growth is propping up household formation. During 2013Q3 the number of households increased by 0.45% (2,420 households) on population growth of 0.25%. Average effective rents remained at 8.9% of average household income from 2013Q2 to 2013Q3.

If you would like to discuss these thoughts in more detail, please contact me:

            Paul B. Hazlett
            Multifamily Investment Advisor
            Coldwell Banker Commercial - Benchmark
            904.421.8523
            PHazlett@CBCBenchmark.com

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