If You Build Them: Class A Apartment Absorption Above Average for Sixth Consecutive Quarter
Rendering of mixed-use building planned in Arlington.
As DC-area employment continues to grow at an impressive rate, with year-over-year growth exceeding the national average, demand for Class A rental housing remains strong in the region, according to Delta Associates’ second quarter report.
With an annual rate of over 10,000 units, absorption of Class A apartments in the DC metro area exceeded the long-term average for the sixth consecutive quarter. The above-average absorption is coupled with rental rates for Class A and Class B apartments rising 2.5 and 2.4 percent, respectively, since the second quarter of 2015.
It is projected that over the next 36 months, absorption rates will continue to exceed the ten-year average. “This projection is predicated upon the “de‐nesting” and “un‐grouping” of potential renters currently living with parents or roommates, along with job growth and a stable or rising ratio of renters to owners,” the report states.
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While 33,000 new apartment units will come online in the region over the next three years, the report predicts that region-wide vacancy will drop 40 basis points to 3.7 percent in 2019, but vary notably from sub-market to sub-market.
Here is a quick snapshot of average rents for high-rise Class A apartments in DC area sub-markets, as defined by Delta:
Note: The rents are an average of studios, one and two-bedroom rental rates at new buildings in the DC area.
Definitions:
Class A apartments are typically large buildings built after 1991, with full amenity packages. Class B buildings are generally older buildings that have been renovated and/or have more limited amenity packages.
See other articles related to: absorption rate, class a, class a apartments, delta associates, rental rates in dc, renting in dc
This article originally published at https://dc.urbanturf.com/articles/blog/apartment_absorption_above_average_for_sixth_consecutive_quarter/11477.
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