Once again, the 36,544-unit Rochester apartment market was one of the tightest among the top markets tracked by Reis, with a second quarter vacancy rate of just 3.0%. This rate placed it 10th among Reis’ top 82 multifamily markets. The current rate is down 20 basis points from year-end 2011 but unchanged from the first quarter. The rate is down 60 basis points year-over-year. The rate increased 10 basis points in the third quarter, according to First Glance data from Reis. The Class A vacancy rate is reported at 2.7%, while Class B/C vacancy finished the quarter at 3.1%. These rates are both below the 5.0% mark, generally considered to be full occupancy, so despite the market’s small size, demand is strong across all Classes. Development remains muted. Reis’ latest construction data show only 1,907 apartments completed in the 10 years ending in 2011, ably met with 1,529 units of net absorption. A total of 137 apartments completed in 2010, none in 2011, and only 104 units so far this year.
Reis reports 665 units under construction in five projects. The Bayfront Town Homes and the Baker Street apartments, with 77 and 64 units, respectively, are forecast to complete in November and December of 2012. The largest project, the Saratoga Crossing, with 296 units, is under construction for completion in June 2013. Net absorption, quiet so far at 93 units in total, is forecast to reach 205 units by the end of 2012, and total 1,126 units by 2016. New construction is expected to total only 899 units in that time span; Reis expects vacancy to remain below 3.0% for the entire forecast period.
Rent gains were strong in the second quarter. The average asking rent increased 0.8% to $799 per month and the average effective rent rose 1.1% to $763 per month. First Glance data show a third quarter asking rent of $806 per month. Class A asking rents are reported at $943 per month and Class B/C rents are $727 per month, up 1.0% and 0.7%, respectively, over the quarter. Reis forecasts annual gains of 2.9% asking and 3.8% effective are forecast for 2012, with higher annual gains to follow.