No new supply came on line in the 161,150-unit Fort Worth apartment market in the second quarter of 2012, and 632 units of net absorption pushed the vacancy rate down 40 basis points to 5.8%. That is down 210 basis points from a year earlier. The Class A rate fell 20 basis points to 4.6%, with the Class B/C rate down 70 to 6.9%. The year-over-year decreases are 140 and 300 basis points, respectively. The rapid filling of Class B/C units implies that low Class A vacancy is forcing tenants to downgrade their expectations. The overall rate fell another 10 basis points in July.
Development was strong here from 1996 to 2009, as the inventory increased by nearly 40,000 units or more than 2,800 per year. But the financial crisis caused development to slow just as the housing crisis pushed people into renters, as net absorption soared to nearly 5,600 units in 2010 followed by just under 4,000 in 2011. The 2012 forecast is similar, as the vacancy rate is expected to end this year at 5.1% and 2013 at 4.7%. In addition to the 1,680 units under construction, however, more than 2,000 planned units now have development schedules. Supply and demand are forecast to balance thereafter as the rate stays under 5.0%.
This year, accordingly, is expected to be the strongest for rent gains. In the second quarter the average asking rent increased 1.1% to $752 per month, while the average effective rent rose 1.4% to $708 per month. Although rents rose just 0.1% by both measures in July, Reis predicts gains of 4.5% asking and 5.6% effective for all of 2012. The annual increases in subsequent years are forecast to be solid but somewhat lower at 4.0% to 4.5%. Respective Class A and B/C asking averages for the second quarter of 2012, meanwhile, were $883 and $622 per month, up 1.3% and 1.0% for the period.
ALN reports a vacancy rate of 7.8%, down 110 basis points from a year earlier, and an asking rent of $733 per month, up 4.7%, in August 2012 for Fort Worth.