Hubbell Report: Metro apartment rents up; demand still strong
Friday, February 28, 2014 7:00 AM
The average apartment vacancy rate in Greater Des Moines rose slightly to 4.6 percent as of January, according to the Des Moines Metro Apartment Survey 2014 recently released by CBRE|Hubbell Commercial. In a separate survey of apartments using state low-income housing tax credits, the average vacancy rate was 3 percent, up from 2.2 percent the prior year.
Overall, apartment vacancy rates in Greater Des Moines have been declining since 2005, when the average vacancy rate peaked at 9.5 percent.
Rents have increased for all market-rate units over the past year, with average rent increases ranging from 3 percent for one-bedroom and two-bedroom units to 5.8 percent for three-bedroom units. For the past four annual surveys, the rental rates have been adjusted for any rent concessions offered, such as a free garage or rent, to arrive at an effective rent. Approximately 9 percent of the market-rate projects offered some type of rental concessions to new tenants, which is a decrease from approximately 14 percent in each of the prior two years.
Approximately 931 new rental apartment units of a planned 2,039 apartment units were added to the rental market in 2013, compared with 756 units in 2012, according to the report. Pent-up demand for rental housing and shifts in lifestyle habits should continue to work in favor of the apartment market to fill new units, said Kyle Gamble, managing director of CBRE|Hubbell Commercial.