In a new study, Willett says metro Atlanta ranks as the national number one market for apartment absorption during the April-June period.
Even though area employment remains well below levels of a year ago, job gains are registering this year, according to Willett. He says an improving economy is "the biggest factor spurring increased leasing activity," and adds that rent cuts and concessions also helped boost demand.
"Concessions are widespread, especially in top-tier communities" that compete with the large number of new properties coming on stream and are vulnerable to losing residents to single-family home purchases. Taking concessions into account, Willett says effective rents in metro Atlanta dropped 1.5% between June 2001 and June 2002.
Monthly rents now average $800 a unit overall and $905 per unit in the generation of projects that came on the market since 1990. "Clearly, rent achievement is being sacrificed to retain existing residents and bring new renters through the front door," Willett says.
As indicated in an earlier M/PF study, the South Atlanta and South Fulton County markets are continuing to post the strongest performance with June occupancy at 93.3%. This makes the region the only one in greater Atlanta to show a positive change --a mere 0.2% --in effective rents during the second quarter.
The 15,700 units in the pipeline, 8,700 of which are scheduled to reach completion during the last half of this year, "point to a hard road ahead for the Atlanta apartment market," Willett concludes.
Apartment construction is taking place in virtually all Atlanta area neighborhoods, and Willett says near-term completions will be especially heavy across Gwinnett County and the intown and midtown areas.
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