The vacancy rate is low in the 36,813-unit metro Hartford apartment market, and rents are rising steadily. Reis reports a 3.1% vacancy rate for the second quarter, unchanged from the quarter before and down 70 basis points from a year earlier. The respective Class A and B/C vacancy rates for the second quarter were 4.1% and 2.3%. Net absorption, above 600 in each of the two years from 2010 to 2011, totaled just 106 in the first half of 2012 followed by 57 in July and August. With the 127-unit The Oaks on the Square completing construction in August in Mansfield, the vacancy rate for that month was up slightly at 3.2%.
As of early October Reis reports 465 apartment units under construction led by the 270-unit second phase of The Mansions at Hockanum Crossing in Vernon. It is due to complete construction this October. Another 538 units in three planned and proposed projects now have estimated development schedules. Thus a significant amount of new supply is expected in this market later this year and during the subsequent four, but demand is forecast to be strong. The vacancy rate is forecast to fall to 2.7% at year-end 2012 and 2.4% at year-end 2013 before completing the forecast period at around 3.0%.
Rent gains are expected to be strong but steady, at 3.5% asking and 4.5% effective in 2012 and around 4.0% by both measures each year thereafter. In the second quarter of 2012 the average asking rent rose 0.7% to $1,017 per month, while the average effective rent increased 1.0% to $983 per month, bringing the year-over-year gains to 3.0% and 3.9%, respectively. Rents rose an additional 0.2% asking and effective in July and August combined. The second quarter average asking rent for Class A space was $1,185 per month, compared with $898 per month for Class B/C.