Q2 2012 Oklahoma City, Oklahoma Apartment Market Trends

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Q2 2012 Oklahoma City, Oklahoma Apartment Market Trends

Vacancy is no longer high in the 82,400-unit Oklahoma City apartment market, and rents are beginning to surge. The second quarter 2012 vacancy rate is 6.3%, down 40 basis points from the prior quarter and 120 from a year earlier. The Class A rate was just 4.0%, compared with 7.2% for Class B/C properties. The quarter’s overall net absorption of 333 units brought the half-year total to 882, compared with just 318 new units completed. Reis predicts a similar net absorption total for the second half of 2012, and an annual total of 1,675 for the year.

A total of 152 units were absorbed in July and August, but the vacancy rate remained at 6.3% as the 184-unit Villas at Summit Pointe completed construction in south Oklahoma City. The 228-unit Level Urban apartments followed in east central OKC in October, and thanks to ongoing new supply the vacancy rate is forecast to remain above 6.0% through year-end 2012. Despite slowing demand, the rate is forecast to eventually level off at about 5.5% as new supply slows as well.

In the second quarter the average asking rent increased 1.1% to $576 per month, with the average effective rent up 1.4% to $555 per month. Gains of 0.3% for each followed for July and August combined, and Reis predicts increases of 4.0% and 5.0% for all of 2012. That would the second largest effective rent gain Reis has recorded in a database going back to 1999, but given how low rents are the strain on tenants would be limited. The effective average is forecast to rise by about 4.5% in each of the subsequent three years. The second quarter 2012 asking average, meanwhile, was $710 per month for Class A units and just $518 per month for Class B/C units.

Sperry Van Ness reports “the Oklahoma City multifamily market continued its bullish run in the first half of 2012 with sales comps hitting $100,000 a unit again for the first time since 2008.”