Apartment rents in Wilmington have been climbing higher this year than in some other metropolitan areas in North Carolina and the U.S., recent analyses show.
The Port City's rents rose more than 8 percent in the first quarter, to an average of $1,050 per month, according to numbers released at the end of March by real estate technology and analytics firm Real Page Inc. (NASDAQ: RP).
"Price increases of roughly 7 to 8% are occurring in Wilmington, N.C.; Tucson, Ariz.; and Gainesville, Fla.," a RealPage news release stated.
That's higher than Charlotte's increase (4%) for the first quarter and the Greensboro/Winston-Salem market's (5.2%), according to the report. It's also higher than the national average of 3.2%.
A jump in apartment rents is a typical occurrence in areas where hurricanes have damaged the housing inventory, said Carl Whitaker, manager of market analytics for RealPage. He said Houston after Hurricane Harvey in 2017 and Orlando after Hurricane Irma hit Florida the same year are other examples of communities that saw increases in apartment rents after storms.
About 1,200 workforce and low-income apartments in New Hanover County were lost because of Hurricane Florence, said Kate Murphy, communications and outreach coordinator for the county.
But the Wilmington market was seeing 5 to 6% rent increases two to three years before Hurricane Florence made landfall near Wrightsville Beach in September last year, Whitaker said.
The most recent apartment occupancy rate for Wilmington that RealPage has, Whitaker said, is 96.7 percent, up from an average of about 95 percent for the past several years. RealPage doesn't include properties where a certain percentage of units are unavailable because of renovations or damage in their calculations until that property has been up and running again for a full year, he said.
The fact that hundreds of apartments were damaged or destroyed as a result of Florence could account for some of that increase in occupancy, "but it was also fairly robust even before that," Whitaker said.
According to a report released this month by apartment search website RENTCafé.com, Wilmington in March recorded the most significant rent hike among the state’s major cities, a 7.3% change year-over-year.
The reports from RENTCafé.com are based on data that comes from Yardi Matrix, an apartment information service and a sister division of RENTCafé, according to the release.
A June 2018 report from Real Data, an apartment market research firm, showed a 7 percent vacancy rate in the Wilmington area and an average rent of $1,076 per month. Real Data will release a Wilmington-market area update in June this year.
Nationwide, according to RealPage, annual rent growth "has topped the 3% mark for six consecutive months, accelerating from a pace that had hovered around 2.7 percent in all of 2017 and in the initial nine months of 2018," the RealPage release stated.
Occupancy in the U.S. as a whole stood at 95.2% for the first quarter, edging up from 95.1% a year ago, according to the release.
“It’s encouraging for apartment investors to see rent growth holding up so well when the new supply volumes are aggressive,” RealPage chief economist Greg Willett said in the release. “While brand new properties still moving through the lease-up process tend to be offering discounts, pricing power actually has improved a bit for luxury developments where the initial resident base is now in place. Properties at middle-tier to lower-end price points are maintaining their already-strong rent growth momentum.”
|Annual Rent Growth Leaders as of 1Q 2019|
|Phoenix, AZ||8.0%||Midland-Odessa, TX||15.2%|
|Las Vegas, NV||7.9%||Wilmington, NC||8.4%|
|Atlanta, GA||5.3%||Tucson, AZ||7.8%|
|Greensboro/Winston-Salem, NC||5.2%||Gainesville, FL||7.2%|
|Memphis, TN||5.1%||Boise, ID||6.8%|
|Sacramento, CA||5.0%||Pensacola, FL||6.6%|
|Riverside-San Bernardino, CA||4.8%||Manchester-Nashua, NH||6.5%|
|Austin, TX||4.7%||Reno, NV||6.4%|
|Jacksonville, FL||4.2%||Santa Maria, CA||6.3%|
|Tampa-St. Petersburg, FL||4.2%||Deltona-Daytona Beach, FL||6.1%|
|Charlotte, NC||4.0%||Huntsville, AL||6.0%|
|Source: RealPage Inc.|
The RealPage report also stated that building in the U.S. apartment sector remains at three-decade highs.
"Market-rate apartment properties under construction contain more than 403,000 units that will be finished during roughly the next 18 months," according to the release.
Johanna Cano - May 20, 2019
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