The apartment vacancy rate in Pulaski County was basically unchanged in the first quarter this year compared with the fourth quarter last year, owners of a Little Rock firm that tracks the central Arkansas apartment market said Friday.
The vacancy rate was 8.8 percent in the first three months of the year, up slightly from 8.7 percent in the fourth quarter last year, said Ted Bailey and Richard Cheek, owners of the Multifamily Group.
The lack of change is normal for the first quarter, Cheek said.
"The apartment market is seasonal," Cheek said. "The first quarter is a time when it's cold and rainy or snowy and people don't get out much to look for apartments. Generally, the second quarter is much different."
The lowest vacancy rate was 4.2 percent for complexes built in the 1990s. Apartments built before 1980 had the highest vacancy rate, 11.2 percent.
Nationally, the apartment vacancy rate is 4.1 percent, said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville.
But even a vacancy rate at 8.8 percent is not out of the ordinary, Deck said.
Developers are continuing to build apartments even though the economy has not rebounded significantly, Cheek said.
"This year I think the market will finally catch its breath, because we don't have a ton of apartments that are coming online," Cheek said.
The Pointe at Brodie Creek in west Little Rock is scheduled to be completed this quarter. It will have 144 units and is already fully leased, Cheek said.
"So we're going to see a tightening of the market in the second quarter," Cheek said.
There are about 15 other apartment complexes planned with completion targets later this year and as late as 2018.
The largest is LIV Riverhouse at 1200 Brookwood Drive in Little Rock's Riverdale area. The 262-unit complex is scheduled for completion later this year.
Another five complexes are scheduled to be finished later this year in Pulaski County, adding more than 440 units to the market.
The availability of funding for developers is driving much of the apartment construction, Bailey said.
"Sometimes people ask, 'Why do they keep building these new complexes?'" Bailey said. "Real estate development is driven by the availability of capital. If the lending community is still providing construction funds to build new projects, then developers are going to develop."
Multifamily housing was one of the first sectors of the economy to recover after the recession, Deck said.
"But we still have not seen enough multifamily housing built [nationally] to keep vacancy rates high," Deck said.
The expense of single-family housing has led to the increase in apartment construction, Deck said.
"So multifamily has been leading the way in the housing recovery," she said.
Much of the multifamily construction nationally is targeting niche markets, such as students, older and retired people or young families, Deck said.
The average monthly rent in Pulaski County was $728 in the first quarter, up $5 from the fourth quarter last year.
The average monthly rent nationally was $1,124, according to Reis Inc., which follows the commercial property market.
Business on 05/16/2015