Kansas City, Mo.–The newest apartment product in Kansas City is currently outperforming the rest of the metro area.
“If you manage to retain your job, rents have come down enough that a lot more people can afford the top-tier product, and people just choose the best product that falls into their price range,” observes Greg Willett, vice president of research & analysis, MPF Research.
While the overall metro’s occupancy is tracking 91.9 percent, the heart of the metro’s apartment market—the suburbs on the Kansas side of the metro, including Overland Park South and Johnson County—is achieving occupancies closer to 95 percent, reports Willett.
Meanwhile, effective rents in the newer product didn’t decline as much as the apartment market as a whole. Newer product declined about 3.1 while the overall market saw a 4.4 percent decline.
Concessions continue to be fairly widespread, though. According to Willett, 59 percent of the product has some free rent attached, a trend that has been seen throughout the entire year without much change. There has been some movement in effective rents, though, with about a 1 percent increase, Willett adds.
The good news is that while Kansas City “did take a hit and is somewhat weaker than most markets, [it] is starting to show signs of improvement,” Willett tells MHN.
On the flip side, however, about 1,000 units are still under construction, which, notes Willett, “for a market of that size is pretty aggressive.” This also includes some projects that were started in the last few months and won’t deliver until 2011. This activity is expected to contribute to a somewhat slower recovery—though Willett maintains that the market is on its way back.