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