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Oklahoma Apartment Fundamentals Steadily Improving
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Written by Antonia S. Perdomo   
Tuesday, 20 December 2011
Yesterday I blogged about the improvement being seen in the national apartment market as evidenced by declining cap rates, and today I want to take a quick look at the current state of the Oklahoma apartment markets. Last year, both Oklahoma City and Tulsa experienced the beginnings of recovery in their apartment markets as vacancy began to slowly decline and rental rates stabilized. According to fourth-quarter 2010 data provided by REIS Inc., it appears that the recovery is picking up solid pace.

During the quarter, Oklahoma City improved the most as vacancy dropped substantially to 8 percent, down from 9.3 percent in the third quarter of 2010. That is by far the most significant quarterly drop in vacancy seen in quite some time for the Oklahoma City market. Not only is leasing activity picking up pace in the metro area, it also appears that removal of several properties from the market due to their inhabitable condition has helped to lower vacancy. Moreover, REIS is forecasting that vacancy should remain stable at its current level throughout the remainder of 2011 and into early 2012.

Rental rates benefited from the sizable decrease in vacancy. During the quarter, average apartment rates improved by 0.8 percent. Rates are expected to remain on the upswing, experiencing very slight increases over the next year.

Stability was the name of the game in the Tulsa market. Fourth-quarter data showed that Tulsa’s apartment vacancy remained relatively unchanged with only a 0.1-percent decline to 8.8 percent, down from 8.9 percent in the third quarter. REIS forecasted that the decrease in vacancy should pick up significant pace in 2011 as it should dip below 8 percent by the end of the year.

The best news for the Tulsa apartment market came in the form of rental rates. REIS reported that average rates increased a strong 1.3 percent in the fourth quarter. The increase was substantially higher than the national average increase in apartment rents of 0.5 percent. REIS also forecasted that the increase in rates will likely level off in 2011 and remain stable throughout the remainder of the year.
Last Updated ( Tuesday, 20 December 2011 )