Metro apartment market continues to gobble up new supply
original article posted by Rob Roberts, Reporter for the Kansas City Business Journal
Still think the Kansas City metro apartment market is overbuilt? Think again.
According to a new CBRE market update, demand continued to outpace supply in the quarter with nearly 1,600 units absorbed. That brought year-to-date absorption to 2,600 units.
Absorption, which takes new construction into account, reflects the net change in supply for a given period. When supply is less than demand, vacancy decreases and absorption is positive — as has been the case with the local multifamily market.
Over the last four quarters, the Kansas City-area market has absorbed 4,100 units, well above the deliveries of 3,770 units over the same period.
With demand outpacing supply, the metro’s average vacancy rate of 4.3 percent is near the historical low of 4.2 percent set in the third quarter of 2015.
The low vacancy rate, combined with the development trend toward more upscale units, pushed the metro’s average apartment rent in the second quarter to another historic peak of $930 — a 3.3 percent increase over the year-ago figure.
According to CBRE, average rents within the 128,166-unit metro market varied last quarter from a low of $690 in the Southwest Kansas City submarket to a high of $1,500 in the University/Plaza submarket. Other higher rent submarkets were Downtown, $1,177; and Overland Park South, $1,068.
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