Charleston Apartment Market Stalls

Apartment market slumps
Complex owners jump through hoops to woo potential renters

May 9, 2008

By Katy Stech – The Post and Courier

A research firm projects the Charleston market can absorb just 800 new apartment units over the next two years based on job growth.

Charles Dalton, a research analyst with Charlotte-based Real Data Apartment Market Research, painted a cautiously guarded picture for local apartment managers and developers on Thursday.

His firm found that the vacancy rate across Charleston is a steady 9.6 percent. That’s the same rate as last year but 2.2 percentage points higher than in 2006.

Dalton predicts the figure will climb into double-digit territory this fall, once the industry’s busy season ends.

“It’s a recession-type environment. … You have to be cautious,” he said.

As a result of the rising vacancies, Dalton said, the area’s median rent is projected to grow at an extremely slow pace or even stagnate.

Some complexes already are offering hundreds of dollars in discounts and other incentives, he said.

The impact will vary by area. James Island and Mount Pleasant, which have seen less multifamily development, likely will be more sheltered than the construction hotbeds of Goose Creek, Summerville and West Ashley.

The local apartment industry still is feeling the effects of the conversions of rental units into condominiums in recent years. On paper, those sales lowered the supply of rental units, but the reality is that many of those units were bought by investors and then rented out again.

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