Apartments’ heat not being set by a thermostat
Renters are feeling the heat of Oklahoma City’s hot apartment market.
Vacancy is generally stable, with even temporary softness from new construction around Quail Springs Mall and in Moore being absorbed into metro-area stats about as soon as new units are being absorbed by the market, according to ARA Newmark.
Midyear figures from REIS Inc. show apartment rents rising faster here than in any other market in the Southwest and at a rate that is 13th highest in the country, ARA Newmark said in its second-quarter report directed by Tim McKay, senior managing director in Oklahoma City.
Average rents have risen for nine consecutive quarters for an overall increase of 6.7 percent, ARA Newmark reported.
Another firm reported the rise in rents as even hotter for smaller units:
Zumper, a national apartment rental website, said the median rent for one-bedroom units was up 12.3 percent just since last summer.
Zumper placed Oklahoma City as the 81st most expensive rental market in the country.
It’s all good for apartment owners, investors and developers.
“In spite of the recent economic downturn, multifamily market fundamentals remain solid. Oklahoma City has benefited from job growth, albeit at a more moderate pace. Significant area positives include low unemployment, a diverse economy (and) a low cost of living,” ARA Newmark said.
Population growth, especially among the likeliest age range for renters, 20-35, is strong, the firm said, noting that strong enrollments at University of Oklahoma and Oklahoma City University add further renter demand.
Downtown thrives
Despite concerns over the struggling energy business and its impact on the central business district, “downtown is thriving,” ARA Newmark said, and “the downtown multifamily market appears to be as strong as ever with rents and occupancies both at historic highs.”
Multifamily property has lost none of its shine as an investment, the firm said, taking a long view:
“Strong buyer interest in multifamily product continues. An affordable market coupled with low interest rates clearly affect the demand, and more equity than ever is looking for deals.”
And a broad view: “Foreign capital is pushing buyers to the Midwest in search of higher yields.”
And a local view: “Buyer interest appears to be strongest in well-located, value-add plays where much of the heavy lifting has been done. High demand for new construction in areas that have not been overbuilt continues.”
And, for investors especially — as well as those who can afford to see past their own bills to the general health of the economy (you know who you are) — a sanguine view:
“In terms of sales, cap rates (returns on investment, basically) have never been lower (but that’s because the quality and price of investment are high), and prices per unit are still setting records. The diversity of the economy is evidenced by the resilience of the multifamily market.”