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Health & Fitness

MoCo Apartment Vacancy Rates Drop in 2012

The Department of Housing and Community Affairs recently released its 2012 survey of multifamily rental facilities and the data shows a tight housing market countywide.

The Department of Housing and Community Affairs recently released its 2012 survey of multifamily rental facilities with 12 or more rental units in Montgomery County.

The resulting data shows a tight housing market countywide with an overall vacancy rate of 3.5 percent. The rate declined 0.2 percentage points from the 2011 rate of 3.7 percent. The vacancy rate for market rate units only was 3.7 percent, down 0.1 percentage point from the 2011 rate of 3.8 percent. The vacancy rate for properties with income restricted units only was 2.8 percent, up 1.0 percentage point from the 2011 rate of 1.8 percent. The average countywide turnover rent (for rental units that changed tenants) is now $1,476, an increase of 2.4 percentage points from 2011. The average countywide holdover rent (for current tenants)  is $1,491. The average reported percentage increase for holdover rents was 4.2 percent.

Highlights – Market and Subsidized Units

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  • The Countywide vacancy rate for all surveyed units was 3.5 percent in 2012, a drop of 0.2 percentage points from the 2011 rate of 3.7 percent.
  • The City of Gaithersburg and the City of Rockville experienced a 0.4 percentage point increase with the vacancy rate in 2012 rising to 3.5 and 3.7 percent respectively. The City of Takoma Park saw a 1.3 percentage point decrease with the vacancy rate falling to 2.4 percent. The unincorporated areas saw a 0.3 percentage point decline with the vacancy rate dropping to 3.5 percent.
  • Vacancy rates by bedroom size ranged from a low of 1.0 percent for 4 bedroom plus units to a high of 3.9 percent for efficiency units. One bedroom units had a vacancy rate of 3.3 percent. The two and three bedroom units had vacancy rates of 3.6 percent.
  • The Silver Spring-Takoma Park market areas had the tightest markets of the major market areas, with a vacancy rate of 3.2 percent, 0.3 percentage points below the countywide average. The highest vacancy rate of the major market areas was found in Colesville-White Oak at 3.9 percent, 0.4 percentage points above the countywide average.
  • Vacancy rates by structure type ranged from a low of 3.2 percent for midrise units to 3.8 percent for highrise units.

Turnover Rates

The 2012 countywide turnover rate (the percentage of rental units that changed tenants) was 31.0 percent, 1.5 percentage points lower than the 2011 turnover rate of 32.5 percent. The City of Takoma Park had the lowest turnover rate of the jurisdictions and major market areas at 17.0 percent, well below the countywide average. The Wheaton market area had lowest average turnover rate of the major market areas at 26.9 percent. The highest turnover rate for the major market areas was found in the Germantown-Gaithersburg market area, with a 36.0 percent turnover rate. Of all the structure types, the midrise apartments had the highest turnover rates at 33.0 percent and the townhouse/piggyback units had the lowest turnover rates at 29.8 percent.

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Turnover Rents

A “Turnover Rent” is defined as the rental rate offered to a prospective tenant for a vacant unit as of April 1, 2012. Turnover rents are often referred to as “street rents” and do not necessarily reflect rents paid by current tenants. Turnover rents are reported as a rent range reflecting the lowest and the highest rents for the reported bedroom size. All turnover rent information is based upon market rate units only. The countywide average turnover rent for market rate units was $1,476 in 2012, an increase of $34 (2.4 percent) from 2011 average rent of $1,442. Increases in turnover rents were found in most categories tracked by the survey.

Highlights – Market Rate Units

  • Units within the jurisdiction of the City of Takoma Park reported the lowest rents, averaging $984. These rents are $492 below the countywide average. The highest rents were reported in the jurisdiction of the City of Rockville, averaging $1,624.
  • All bedroom sizes experienced rent increases in the past year. The increases ranged from 1.4 percent for the three bedroom units to a high of 11.6 percent for the four bedroom plus units.
  • Garden apartments had the lowest average rent at $1,315, $161 below the countywide average. Townhouse/piggyback buildings had the highest average rent at $1,956, $480 above the countywide average.
  • The highest rents among the major market areas were reported in Bethesda-Chevy Chase, averaging $1,961, $485 above the countywide average. The lowest rent reported in a major market area was in the Germantown-Gaithersburg market area, averaging $1,259, $217 below the countywide average of $1,476.
  • The Silver Spring-Takoma Park market area had the highest average increase of the major market areas at 5.2 percent. The Rockville market area had the slight decrease at (0.2%) percent.
  • The average rent for units with all utilities included was $1,574, while the average rent for units with no utilities included was lower at $1,507.
  • Average rents for units that include only water or only water and one or more, but not all, utilities, ranged from a low of $1,322 for units with only water included to a high of $1,345 for units with some utilities included.

Holdover Rent

The “holdover rent” is defined as the rental rate paid by a current tenant of a market rate unit upon lease renewal. The “holdover rent” is reported as the average holdover rent by specific bedroom size. Not all of the facilities responding to the survey provided holdover rent information. Therefore, the total number of units reported in the following charts is less than the total number of units reported by all of the facilities responding to the survey. Information regarding holdover rents and holdover rent increases was obtained for 58,570 units, which represented 98.8 percent of the 59,291 market rate units included in the survey.

The 2012 countywide average holdover rent for market rate units was $1,491 and average reported rent increase was 4.2 percent. The City of Takoma Park had the lowest average holdover rent at $1,005 and the lowest percentage rent increase at 2.9 percent. The highest holdover average rent, $1,734, was found in the City of Rockville. The highest average percentage increase, 4.3 percent, was also found in the unincorporated areas. The average holdover rents by major market area ranged from a low of $1,311 in Germantown-Gaithersburg to a high of $2,000 in Bethesda-Chevy Chase. The average holdover rent increase by major market area ranged from a low 3.1 percent in Wheaton to a high of 4.9 percent in Silver Spring-Takoma Park.

The full report, Rental Apartment Vacancy Report 2012, has additional information on neighborhoods and specific zip codes.

To learn more about Montgomery County residential real estate, visit my blog HouseInvestor.net.

Photo courtesy of MoCo Government.

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