Rental housing shortage eases

Mountain Express - Mike Cronin - 21 December 2016

Third-quarter data released by two real estate research firms show an improving environment for Asheville metro area renters. After a late 2014 report showed a rental vacancy rate of less than 1 percent in Asheville and Buncombe County, local officials and renters have frequently described the area’s shortage of affordable housing as a crisis. Any easing of the rental market is likely to be received as welcome news — except perhaps by landlords.

In 2016, rent-price inflation slowed, and rental vacancy rates increased, according to Reis, a New York-based company, and Axiometrics Inc., of Dallas.

Asking monthly rental-rate increases dipped to 0.5 percent during this year’s third quarter from 2 percent during the second quarter, according to a Reis report on the Asheville metro area.

The median asking rent in Buncombe, Haywood, Henderson and Madison counties rose to $1,044 in the third quarter over $1,016 in the previous quarter, Reis researchers wrote.

Reis surveyed all units — from studio to multibedroom apartments — in 58 multifamily developments to determine its figures.

Using a different methodology, Axiometrics researchers also found rent inflation dropped in this year’s third quarter from the previous quarter.

The effective monthly rent increase fell to 3 percent from 3.1 percent between the two quarters.

Effective rental rates include any discounts or concessions landlords provide tenants. Asking rental rates do not.

The metro’s average effective monthly rent climbed to $1,097 during the third quarter over $1,080 in the second quarter.

Axiometrics does not provide a median figure. Its conclusions are based on a survey of 26 multifamily developments in the metro area.

The rental rates reported by both firms fall within the range that the January 2015 Bowen report found during its late 2014 examination of rental properties in Buncombe, Henderson, Madison and Transylvania counties. Median rents for market-rate apartments ranged from $832 to $3,300 and $583 to $1,187 for tax-credit units, according to researchers from Bowen National Research, an Ohio-based real estate market consulting firm.

Asheville officials paid Bowen $29,750 for that report.

The Bowen assessment also concluded that a less than 1 percent rental-unit vacancy rate existed in those four counties.
Bowen researchers determined that Asheville’s rental vacancy rate and Buncombe County’s rental vacancy rate also were below 1 percent.

But the Reis data for 2016 show a 6.8 percent vacancy rate during the second and third quarters and 7 percent for all of this year’s quarters.

Vacancy rates were lower during this year’s first three quarters, according to Axiometrics. The rate dropped to 4.1 percent in the third quarter from 4.5 percent in the second. It stood at 4.8 percent during the first. The company’s report did not provide a percentage for 2016’s first three quarters combined.

Asheville officials plan to release an updated report from Bowen, focused exclusively on the rental landscape in Asheville and Buncombe County, before the year’s end, said Jeff Staudinger, the city’s assistant director of community and economic development. The city paid the company $4,500 for that work, Staudinger said.