News
June 28, 2017Spring 2017 Capital Region Multifamily Rental Market Report Shows Market Becoming More Segmented
Sunrise Management & Consulting today announced the release of its Spring 2017 multifamily rental market report. Data culled from over 1,900 apartment communities representing over 300,000 units shows rents are starting to normalize across most of the Northeast. The annual survey of rental conditions in the multi-family housing industry details average asking rental rates by unit mix, by square footage, and tracks historical trending data on a county basis. The free report is available for download at www.sunrisemc.com.
The research team at Sunrise Management & Consulting found that rents per square foot in most markets in the Northeast are returning closer to their historical average rate of increase. In addition, vacancy rates also seem to be remaining low across all market areas, even as new product is being brought to market, showing absorption rates are still strong.
Jesse Holland, president and founder of Sunrise Management & Consulting, explains that the findings show that the markets are stabilizing. “The slowdown in the increasing growth of rent is at or near the end of the cycle and may indicate a more conservative approach to real estate investment by developers, owners, and investors,” explains Holland. “Competition between properties based on amenities, location, and delivery of services will have an increasing impact on the success of future multifamily investments.”
The 2017 multifamily market report shows that, since the Spring of 2015, there is an increasing segmentation of rental markets across the Capital region, which includes the counties of Albany, Rensselaer, Saratoga, and Schenectady.
- In Saratoga County, the rate of rental increase has decreased. The rate was 10.62% in the Spring of 2015, 5.60% in the Spring of 2016, and 1.52% in the Spring of 2017. While rents are still going up, they are going up at a much slower rate.
- In Schenectady County, the rate of rental increase has increased. The rate was 3.19% in the Spring of 2015, 5.15% in the Spring of 2016, and 6.86% in the Spring of 2017.
- In Albany County, the rate of rental increase has been variable. The rate was 6.19% in the Spring of 2015, 2.91% in the Spring of 2016, and 4.72% in the Spring of 2017.
- In Rensselaer County, the rate of rental increase has stayed relatively flat. The rate was 2.06% in the Spring of 2015, 4.04% in the Spring of 2016, and 1.94% and Spring of 2017.
According to Holland, the data suggests that market forces are having a more local impact: “All real estate is local. As has been the case throughout history, the three most important things in real estate are location, location, location. We’ve had a tremendous building boom in the Capital Region; however, as the numbers suggest, in some areas the demand has been satisfied. In others, there is still untapped demand. As market forces continue to evolve, lenders and developers may take a more cautious approach in certain markets.”
