Another 4Q Smackdown for St. Louis
In MPF Research’s video on the St. Louis apartment market performance as of 3rd quarter, Jay Parsons told you that the metro spent most of 2011 trying to fill in the giant hole dug during the final three months of 2010. This is a spot where seasonal struggles late in the year very often prove to be quite pronounced, and the pattern registered again at the end of 2011.
St. Louis apartments suffered approximately 1,700 net move-outs in the October-December 2011 time frame.
These resident losses took occupancy in St. Louis down 1.5 percentage points on a quarterly basis. Late 2011 occupancy of 92.1 percent was up a scant 0.3 points from the late 2010 result.
Pricing also backtracked in St. Louis during 4th quarter 2011. Effective rents for new leases fell 1.1 percent. That performance wasn’t as bad as the late 2010 loss, however, so annual rent change actually got a bit better. For calendar 2011, effective rents in metro St. Louis grew 2.7 percent, well below the national norm but not a terrible result.
St. Charles County usually is the top-rated submarket in metro St. Louis, and those relatively upscale suburbs again registered performance premiums in late 2011. Occupancy at year’s end was 96 percent, barely moving from the 3rd quarter level. While St. Charles County apartments saw pricing power slide 1.3 percent specifically during 4th quarter, the annual increase was very solid at 4.3 percent, due to robust jumps that occurred during the initial three quarters of the year.
Apartment market fundamentals in St. Louis likely will trend generally upward at a slow pace over the near term, though a cooling employment growth rate is of some concern. After annual job production got up to 1.2 percent around the middle of 2011, the number eased to 0.2 percent by December, according to preliminary figures from the Bureau of Labor Statistics. Furthermore, as is almost always the case here, look for a lot of the momentum that is likely to show up in 2nd and 3rd quarter results to be erased by another lousy 4Q seasonal shift.
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