Report: New Haven Area Tightest U.S. Rental Market
January 07, 2014|By KENNETH R. GOSSELIN, firstname.lastname@example.org, The Hartford Courant
Here’s why: For the third quarter in a row, the New Haven area has the lowest apartment vacancy rate among the 79 U.S. metro areas tracked by Reis Inc., a real estate research firm.
New Haven apartment vacancy rate was 2.2 percent at the end of 2013, down 0.4 percentage point from a year ago. Average rent rose 2.5 percent to $1,154.
The Hartford area also ranked high on the list, coming in at number six. Hartford has a 2.8 percent vacancy, down 0.4 percentage point from a year ago. Average rent rose 1.8 percent to $1,013 in the same period, according to Reis.
Nationwide, apartment vacancy was 4.1 percent in the last three months of 2013. Average rent was $1,083, up 0.8 percent.
“Clearly, New Haven is very popular right now,” Matthew Nemerson, the city’s economic development administrator, said Tuesday. “New Haven is clearly an attractive place even if you are not working in New Haven.”
Tuesday’s report covers the wider New Haven metro area where, Nemerson said, the stock of apartments also is tight, contributing to the low vacancy rate.
Reis noted that Yale University’s dominant presence in the city also creates strong demand in the city’s rental market, both from students and school employees.
Nemerson said the city is responding to the need for more rentals, with 1,000 units expected to come on the market in and around the downtown area in the next few years. One of those plans would add apartments to the upper floors of the former Union Trust building, he said.
The redevelopment of the former New Haven Coliseum site also would add hundreds of apartments to the downtown area.
Nemerson, the former president of the Connecticut Technology Council, sought to be mayor of New Haven, but later threw his support behind Toni Harp, who was inaugurated Jan. 1.
Downtown Hartford also could see the addition of hundreds of apartments in the next 12 to 18 months. Four are now underway: Three are conversions of former commercial buildings and a fourth, at Front Street, is new construction.
Nationally, demand remained strong throughout all of 2013.
“Demand for apartments remains strong four years after the recovery began, even as construction has been gradually increasing,” said Ryan Severino, senior economist at Reis. “Not even the seasonal weakness normally observed during the fourth quarters of calendar years had much, if any, impact on the market dynamics.”
The list also included Fairfield County area at number 61, with a 5 percent vacancy rate. Vacancy also rose by 0.4 percentage point compared with a year ago. Average rents rose 1 percent, to $1,856, up 1 percent from a year ago.
The top 10 tightest U.S. metro areas are:
1. New Haven: 2.2 percent
2. San Diego: 2.6 percent
3. San Jose: 2.7 percent
4. New York: 2.7 percent
5. Buffalo: 2.7 percent
6. Hartford: 2.8 percent
7. Minneapolis: 2.8 percent
8. Oakland-East Bay: 2.8 percent
9. Ventura County: 2.8 percent
10. Central New Jersey: 2.9 percent
SOURCE: Reis, Inc.