Apartment market rebounds

Daily Record, The (Baltimore), May 20, 2004 by Ezra Fieser

Leasing agents for Centerpoint, an apartment building under construction in downtown Baltimore, don't have much to show potential renters.

It's pretty much just hardhat tours at this point, Kelly Kumper, an agent for Bozzuto Management, the company managing the market- rate building.

But the absence of a furnished model doesn't seem to matter.

The first renters are not scheduled to move in until July 15, yet Kumper has been inundated with phone calls and e-mail inquiries.

The company has leased 24 of the building's 392 units, which will range in price from $600 to $4,500 monthly, according to its Web site.

Leasing has gone really well, Kumper said. I'm pleased. I just hope it stays like this.

According to a report released yesterday by the Washington-based National Association of Home Builders, the rebound of the apartment market is here to stay.

The association's multifamily market index, a quarterly nationwide survey of developers and landlords designed to judge market conditions for rental properties, jumped more than 17 points to 64 at the end of the first quarter.

The scale is from one to 100, with a 50 rating indicating an equal number of positive and negative responses. Positive responses generally indicate better conditions for apartment building owners, from more inquiries to less of a need for rental concessions.

The evolving upswing in the job creation numbers bodes well for the multi-family sector, David Seiders, the association's chief economist, said in a statement. Job creation often leads to new household formation and new households often tend to be renters.

The Baltimore area saw its share of the increase. According to a first-quarter report by Bethesda-based Transwestern Commercial Services, the overall vacancy rate for the area was nearly cut in half from the first quarter 2003. At the end of March, only 5.5 percent of apartments were vacant, compared to 10.1 percent a year ago.

Rents also increased 2.1 percent in the area since the first quarter 2003. Landlords receive an average of $1.13 per square foot.

The report predicts the growing job market will pick up steam during the next three years. Roughly 7,000 jobs were added in 2003 in the region, according to Bureau of Labor Statistics numbers. The report expects the region to add nearly 20,000 jobs each year until 2006.

The trend is of particular importance to Baltimore, which has 2,706 apartments slated to open during the next three years.

The city had a larger drop in vacancy rates than any other regional submarket over the past year, going from a 15.9 percent vacancy rate to a 5.6 percent rate at the end of March, according to the report. Landlords get $1.38 per square foot, or $1,297 per unit, for city rentals, the highest rate for the region.