Charleston, S.C.—The apartment market in Charleston bottomed out at the beginning of 2009, asserts Jenny Shelden Pauswinski, multifamily market analyst at Charlotte, N.C.-based Real Data, which tracks apartment markets in the major metro markets of the Southeast, including statistics on over 900,000 units.
Occupancy in August 2009 was sitting at 88.9 percent, compared with 84.7 percent this past February. In addition, 630 units were under construction at this time, compared with 1,427 units in February and 1,612 units in August 2008. An additional 2,069 units are in the pipeline but it is unknown when construction will begin on these projects.
“To compensate for large amounts of new supply, most communities have either reduced their rents or are running concessions of up to two months free,” Pauswinski tells MHN. “In turn, absorption rates over the past six months are positive across all submarkets.” She notes that 1,852 units were absorbed in this time period, the highest rate since 1995, when Real Data began tracking these numbers.
Same-store rents have decreased 1.1 percent over the past six months and 3.8 percent year-over-year, from August 2008 to August 2009.
Compounding the problem is the shadow market that remains in competition to traditional apartments, though it has lessened. “I think people are beginning to realize that there are benefits to renting an apartment that is well managed and has amenities like a pool and maintenance,” Pauswinski asserts. “When you rent a home or condo, you have a lot more responsibility, which isn’t appealing for young singles or couples.”
Charleston is faring better than many other South Carolina markets, notes Pauswinski, who credits this to the fact that it has more job growth, as well as “a lot of natural amenities that make people want to live there.”