The 17,316-unit Syracuse apartment market placed sixth in Reis’ list of the tightest top markets in the second quarter of 2012. The 2.8% rate is 30 basis points higher than the rate recorded in San Jose, the next up the list, but is in fact down 40 basis points from the prior quarter and down 60 year-over-year. First Glance data from Reis indicate a third quarter vacancy rate of 2.6%. Class A vacancy is reported at 3.4%, down 60 basis points from the prior quarter, and the Class B/C vacancy rate is reported at 2.4%, down 10 basis points. Syracuse is a small multi-family market, but these rates indicate an underserved population of renters who will accept all levels of multifamily product. Reis records a small number (384) of apartments completing from 2000 to 2011, almost all of which were absorbed in that time span.
So far in 2012, no apartments have completed in Reis submarket areas, although 29 units completed in the Stevedore Lofts in Oswego County in June. The only apartments under construction are the 87 units in the Pine Block Redevelopment, which has a completion date of December 2012. In an adjustment from prior estimates, Reis predicts that apartment development will remain low key in the forthcoming years. After 2012’s 87 units, only another 165 are forecast through 2016. Net absorption during the 2012 to 2016 period is forecast at 207 units. Apartments do not last long in Syracuse.
Rents here are generally low. Reis reports second quarter average asking and effective rents of $720 and $697 per month, up 0.9% and 1.1% for the quarter, and up 2.4% and 3.0% over 12 months. These are solid rental gains for any market. Class A asking rents are reported at $816 per month, up 1.2% over the quarter, and Class B/C rents at $645 per month, up 0.5%. First Glance data from Reis indicate a third quarter asking rent of $723 per month. Reis forecasts annual gains of 2.9% asking and 3.9% effective in 2012, followed by increasingly larger gains; eventually reaching 4.0% for effective rents by the outlying years of the Reis forecast period.