2011 Hampton Roads Real Estate Market Review - College of ...

General Overview
The Virginia Beach-Norfolk-Newport News Apartment Report,
published by Real Data, is a detailed analysis of the rental market
within conventional apartment communities in the Hampton Roads region.
The area has been divided into nine submarkets: Chesapeake, Hampton,
Newport News, Norfolk, Portsmouth, Suffolk, Virginia Beach,
Williamsburg and York. Combined, these areas contain a survey base of
over 92,000 units within conventional apartment communities of 50 or
more units each.
The Virginia Beach-Norfolk-Newport News market is divided into two
portions by the James River. The Peninsula area is north of the James
River and contains Hampton, Newport News, Williamsburg and York. The
Southside area is south of the James River and contains Chesapeake,
Norfolk, Portsmouth, Suffolk and Virginia Beach. The cities with the
highest concentration of units are Virginia Beach and Newport News,
which accounts for nearly one half of the region’s apartment units.
Like the rest of the country, the Hampton Roads apartment market
weakened in 2008 and 2009 as the housing bubble collapsed and the
economy entered into a recession. Occupancy rates fell to their lowest level in over ten years in the first quarter of
2009 and rent growth was stagnant for most of 2008 and 2009. Since that time, occupancies have steadily improved
with average occupancy rising to 94.7% in the fourth quarter of 2010. The turnaround is due to strengthening demand
for rentals in lieu of home ownership and a limited development
pipeline which has kept supply in check.
Submarket Percentages
Development activity remains moderate. As of October 2010,
2%
there were only 1,100 units under construction; however, there were
4%
York County
more than 4,000 units proposed. Many of the proposed projects are
Williamsburg 11%
struggling to obtain financing in the current lending environment even
1%
Chesapeake
Suffolk
though market fundamentals look favorable through 2012.
The average quoted rental rate is $900, with one-bedroom rents 25%
Virginia
averaging $803 per month, two-bedroom units averaging $905 per
Beach
month, and three-bedroom units reporting an average rental rate of
$1,080 per month. Average rental rates from existing inventory
increased by $15.48 in the last twelve months, while this is a modest
increase over last year, it does indicate an improving market in terms
8%
of rent growth. Approximately 20% of rental communities are offering
Portsmouth
some type of rental concessions, but in terms of the market as a whole,
14%
the concessions are only moderate with overall rents rising.
Norfolk
11%
Hampton
23%
Newport
News
2011 Hampton Roads Real Estate Market Review
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