Demand is strong in the 65,600-unit Tulsa apartment market, but a surge of new supply is slowing the decline of vacancy. In the second quarter the 248-unit Encore on Memorial and the 128-unit second phase of The Village at Crown Woods each completed construction, offsetting solid demand. By August the vacancy rate was 7.1%, slightly higher than it had been at the start of the year. The second quarter Class A and B/C vacancy rates were 7.4% and 6.7% according to Reis. A total of 1,049 units completed construction in the first half of 2012, leaving 476 under construction.
Reis predicts the 2012 completion total will be 1,054, the second most since 2000. Net absorption, however, had already totaled 901 by August, and the full-year prediction is nearly 1,500, the most on record. The vacancy rate is forecast to end the year at 6.2%, and then level off around 5.5% starting in 2013, as new supply slows down.
Tulsa’s rent gains remained strong in the second quarter of 2012, as the average asking rent rose 0.8% to $601 per month and the average effective rent increased 1.0% to $569 per month. The year-over-year gains were 2.6% and 3.3%, respectively. Though the additional increases through August were modest, Reis predicts increases of 3.3% asking and 4.4% effective for all of 2012, the largest increase since before the recession. Reis expects this to stand as the largest increase of the forecast period, which is generally expected to see annual gains of 3.5% to 4.0% per-year. The respective Class A and B/C asking averages for the second quarter of 2012, meanwhile, were $756 and $533 per month, up 1.1% and 0.4% during the quarter. The year-over-year gains were 2.9% for Class A units and 1.9% for Class B/C at the time.
Sperry Van Ness reports an overall vacancy rate of 7.2% for Tulsa during the first half of 2012, down from 8.0% a year earlier. The average rent for a one-bedroom unit was $0.77 psf per month, according to this source.