A report from the U.S. Census today found that rental housing vacancy in the Hartford metro area dipped to 7.45 percent in 2011, but another report with more up-to-date statistics shows an even tighter rental market in 2013.
Marcus & Millichap recently estimated that the Hartford metro area now has a 3.2 percent rental vacancy rate, down from 3.4 percent a year ago. The vacancy could drop to 3 percent later this year.
The median rent rose 3.5 percent to $995 a month in 2012, but could rise as much as another 4 percent this year, according to Marcus & Millichap. Landlords aren’t offering as many concessions to attract renters.
“Uncertainty surrounds the local housing market and weak employment growth will keep [renters in the newest buildings] in apartments this year and support new demand, helping to pull down the rate even further,” according to a recent Marcus & Millichap forecast for the Hartford area.
The two reports cannot be directly compared because they were compiled using different criteria and may not contain the exact same towns and cities. But the Marcus & Millichap report suggests a particularly tight apartment market now exists in the Hartford area.
Steve Witten, executive vice president in Marcus & Millichap’s New Haven office, told me today New Haven and Fairfield counties are seeing similar vacancy rates.
The Marcus & Millichap report also found:
- Developers added 477 market-rate units in the Hartford area in 2012, expanding inventory by 1.3 percent. The 270-unit second phase of the Mansions at Hockanum Crossing was the biggest.
- Only 190 market-rate apartments are under way in the metro, all of which will be completed this year. About 3,000 more are planned, but only 10 percent have groundbreaking dates.
- Investors in apartment properties have paid increasingly higher prices per unit in each of the past four years. The median sale price in 2012 was $61,300 a unit, a 2-percent increase from the previous year.
In downtown Hartford alone, at least 1,000 units are planned in the next several years, the majority of them market-rate apartments.