If you’ve been searching for an apartment in the DC area you may have noticed something: a dearth of reasonably priced apartments.
Arboretum Place, new apartment project in DC
According to Delta Associates’ third quarter report released today, rents in the DC area have soared 7.3 percent for Class A and B apartments over the past twelve months and vacancy rates are at just 2.5 percent. These factors have combined to make the DC region one of the most expensive and competitive rental markets in the nation. (Inside the beltway, the Columbia Heights and Shaw neighborhoods saw the lowest stabilized vacancy rates at 2.5 percent. The Capitol East submarket saw its rents increase by 5.3 percent on average, the biggest increase for a submarket in the city.)
With the recession officially over, DC is experiencing one of the fastest recovery paces in the nation. The metro area added 41,800 jobs in the 12 months leading up to July, according to the Bureau of Labor Statistics. The resulting migration of job hunters to Washington has strained the current rental supply and driven up rental rates. Consumer distaste for ownership in the housing downturn has shifted the preference of DC-area residents towards renting, the report said.
“Over the past two years the percentage of renters versus owners in the Washington metro [region] has grown at twice the national average,” analysts at Delta Associates wrote.
Despite this news, housing prices remain strong in the region increasing by 7.5 percent in the 12 months ending in June 2010, according to the Federal Housing Finance Agency. In comparison, home prices nationwide decreased by 1.6 percent during the same period.
High rental prices will continue to increase in the final quarter of 2010 and will accelerate in 2011, according to Delta Associates. The report also noted that as fewer new apartment projects come online, vacancy rates will decrease even further during 2011. Even with the increase in new apartment projects slated to come online in 2012, the DC Metro rental supply will remain low until those projects deliver.
This article originally published at http://dc.urbanturf.com/articles/blog/report_dc_area_apartment_rents_are_up_vacancies_very_low/2544
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