THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, September 24, 1994 TAG: 9409220330
SECTION: REAL ESTATE WEEKLY PAGE: 06 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Medium: 90 lines
What a difference a year makes.
In the Hampton Roads rental market, 12 months can mean the difference between a landlord's and a tenant's market, vacancies vs. occupied apartments.
Apartments, townhouses, condominiums and houses-for-rent have become more scarce. Demand has increased from last year, pleasantly surprising real estate agents and brokers. Reasons for the declining vacancies vary but apartment dwellers and other tenants can be sure of one thing: Rents are going up.
``Be prepared to pay more than last year,'' warned C.C. Taylor of Taylor Realty and chairman of the Tidewater Multifamily Housing Council. Rents are 3 percent to 4 percent higher, he estimated. ``That's tremendous because for years, you couldn't raise rents. There was such a glut in the market'' of rental units.
``It's becoming more of a landlord's market,'' said Remona S. Murmillo, director of property management at William E. Wood & Associates. In a landlord's market, demand outpaces the supply of available units for rent so landlords can command higher prices for their units. A casual glance at this year's apartment guide compared to 1993 shows that monthly rents have gone up anywhere from $10 to almost $100.
People are staying put, part of the reason for the low vacancy rate, Murmillo said. Few people are moving across town to different locations or moving up in the size of their apartments. If they do move, they usually go straight from a condo or an apartment to buying a house, she said.
``We've noticed - with interest rates ticking up - less people moving out to buy houses,'' said Jordan E. Slone, president of Harbor Group Real Estate, which manages 5,000 units in the Southeast. Higher interest rates have deterred tenants from leaving apartments to buy houses, he said.
A. Parker Neff Sr., who manages about 800 apartments, has raised rents between 2 percent and 3 percent, not much in the big picture but a significant trend. The president of Cooke and Neff Inc. said rents may go up to 5 percent if demand for apartments continues.
Last year, when Neff looked for roofers to repair some of his properties, he could have chosen from three that were available. Now, he might find only one who is free to do work for him, he said.
``That's indicative of what the economy's doing,'' he said. Contractors are so busy working on apartment or rental improvements, they have to turn down jobs, Neff said.
In every rental category, real estate folks have reported fewer available units, whether they are one bedroom apartments or five-bedroom houses.
The Hampton Roads apartment market is pretty healthy by real estate agents' standards. According to the Tidewater Multifamily Housing Council, the vacancy rate for apartments ranges just below 8 percent. Trenda Robertson, the Virginia regional director for Drucker & Falk, says 3 percent at most of her company's 18,000 apartment units are available.
``I think the market is stronger,'' Robertson said. ``We've always had vacancies, but we've absorbed the vacancies from the military moving and the shipyards cutting back.''
The local rental market is particularly sensitive to national and international events. ``Anything that happens affects the multifamily industry because we rely on government employees, the military and shipyards'' for tenants, she said. From Maryland to Hampton Roads, the rental market has tightened as vacancies have dropped, she added.
The military's return from missions like Desert Storm has contributed to the lower rental vacancies as well as the healthy home sales market. With so many people buying houses over the last year, fewer houses are available for rent.
Ann Swearingen, director of GSH Property Management, thinks people are a little afraid to buy houses now and have opted to rent instead.
``Home sales are slowing down a little bit because of the increasing interest rates and another threat of an increase before the end of the year,'' she said.
Demand for rental property tends to be cyclical, Swearingen said. Construction of multifamily units in Hampton Roads has slowed since the mid-'80s. She and others speculate that building may soon follow as a result of the high demand. But executives think real estate property managers should just work with what's already available.
``There are too many apartments on the market,'' said Tim Gifford, president of Coldwell Banker/Gifford Realty. ``When an owner puts money back into it, keeps it upgraded and does maintenance that needs to be done on a project, you can keep vacancies down.'' ILLUSTRATION: Staff photo by Mort Fryman
Remona S. Murmillo, director of property management at William E.
Wood & Associates, shows a single-family home in the Church Point
Place section of Virginia Beach. ``It's becoming more of a
landlord's market,'' she said.
by CNB