The Westchester apartment market features rock bottom vacancy, strong but not extreme rent gains, and something of a supply boom. Reis data put the second quarter 2012 vacancy rate for 39,526 units at just 2.9%, down 10 basis points from the prior quarter and 40 from a year earlier. Vacancy fell despite the completion of the 100-unit The Mariner in Port Chester, as net absorption totaled 142 units. The Class A rate was 3.4%, up 10 basis points for the quarter, while the Class B/C rate was 2.7%, down 20.
Another 288 units are expected to be added in November in the second phase of Avalon Green in Elmsford, in the central county corridor, the only specifically named apartment project under construction. Additional new supply, however, may come from the condominium sector, where 167 units completed in March and more than 400 are under construction. Although demand weakened over the summer, allowing the vacancy rate to edge up to 3.1%, Reis predicts any new supply that emerges to be quickly absorbed. The vacancy rate is forecast to remain at just over 3.0% through 2016.
Westchester rents continue to rise. In the second quarter the average asking rent increased 1.0% to $1,920 per month with the average effective rent up 1.1% to $1,843 per month, bringing the year-over-year gains to 2.2% and 2.6%, respectively. The second quarter Class A and B/C asking averages were $2,584 and $1,542 per month, up 0.3% and 1.5% from the prior quarter. Overall rents edge down a dollar or two from their mid-year levels by August, but Reis predicts solid gains of 3.0% asking and 4.0% effective for all of 2012. Despite low vacancy, subsequent annual increases are forecast to be similar for the asking average and somewhat lower for the effective average.