The vacancy rate for the 34,250-unit Greenville area apartment market tightened further in the second quarter of 2012, and the pace of rent gains accelerated sharply. The 78 units of positive net absorption for the quarter brought the half-year total to 168. No new units had completed construction in 2011, and none were added during the first seven months of 2012. The second quarter vacancy rate was 5.5%, down 20 basis points from the prior quarter and 160 from a year earlier. Reis had never recorded a rate below 6.7% here before 2011. The second quarter Class A and B/C vacancy rates were 5.6% and 5.4%, down 10 and 40 basis points for the period. As the market has tightened and become more expensive, demand has shifted to Class B/C.
The 48-unit 100 Washington Apartments in north Greenville completed construction in August, but it is expected to be the only new supply this year. While the vacancy rate for August was 5.6%, it is expected to end 2012 at just 5.1%. The 346-unit The Aventine at Greenville, however, is under construction for completion in 2013, and planning is extensive. New supply is forecast to approximately balance net absorption starting next year, with each running a modest 300-plus units per year on average.
In the second quarter the average asking rent increased 1.2% to $668 per month and the average effective rent rose 1.4% to $624 per month. This brought the year-over-year increases to 2.5% and 3.1%, respectively. Additional gains of 0.6% asking and 0.5% effective were recorded for July and August combined, and Reis predicts gains of 3.6% and 4.4% for all of 2012. Similar increases are forecast to follow the next two years, with even stronger increases forecast for 2015, but the base from which those gains will rise is low. The effective average is still expected to be just $752 per month in 2016. The respective Class A and B/C asking averages for the second quarter of 2012, meanwhile, were $764 per month, up 1.3% for the period, and $561 per month, up 1.1%.