Industry News

Market Reporting that Matters

Hartford Makes a Whale of a Rent Growth Leap

February Rent Growth 15th Highest in U.S.

By Dave Sorter | Tuesday, March 28, 2017


Last September, Pratt & Whitney President Robert Leduc said that the defense contractor would add 8,000 jobs in the Hartford area over the next 10 years – most of them sooner, rather than later.

“We can’t hire fast enough,” “The Hartford Courant” quoted Leduc as saying in an appearance at the Middlesex County Chamber of Commerce.

The planned hiring may be one reason why the Hartford apartment market stunningly recorded 3.5% annual effective rent growth in February, up from 1.0% in January in a market where rent growth was negative as recently as last August. The February rate was the 15th highest in the nation among major markets.

 Click to enlarge in new tab

Appropriately, the East Hartford/Manchester submarket, home of Pratt & Whitney’s headquarters, was the primary driver of Hartford’s surge, netting 11.8% rent growth in February – after sitting at -4.5% in July 2016. The rate has been steadily climbing since Leduc’s announcement. Though rent growth in other submarkets has strengthened, no other submarket recorded a rate above 2.2%.

 

 Click to enlarge in new tab

That may be because any jobs that Pratt & Whitney added were almost all canceled out marketwide by job losses in other sectors. While Professional & Business Services employment grew by 2.4% in the 12 months ending in February and Other Services jobs grew by 2.3%; Mining, Logging & Construction lost 5.5% of its jobs from one year earlier; and Information had -3.4% job growth.

And that doesn’t even take into account the layoffs at Bristol-based ESPN – plus, the Worldwide Leader is planning more layoffs, primarily of on-air talent, this year.

Thus, Hartford as a whole had 0.3% annual job growth in February. Still, the Pratt & Whitney gains in East Hartford/Manchester drove that submarket’s rent growth – assuming these new employees could find a place to live.

 

 Click to enlarge in new tab

Hartford overall occupancy was 95.3% in February, and the East Hartford/Manchester submarket was 95.0% occupied – essentially full by Axiometrics’ methodology. Meanwhile, only 855 units have been identified for 2017 delivery metrowide, absolutely none of them earmarked for the East Hartford/Manchester area.

Hartford’s average rent of $1,314 in February was middle of the pack among major markets and just $29 above the national average, which is pretty affordable for a large metro along the Boston-Washington Northeast corridor. But homeownership may be more affordable.

Hartford sported a Housing Affordability Index of 204.8 in the fourth quarter of 2016 on a scale where a score of 100 means a family making the median income for the area can afford a median-priced home and anything higher means more affordable. Hartford’s score was the fifth highest among major markets and certainly the highest in the northeast.

The median home price of $224,300 with a higher-than average median income of $86,800 help matters, but inventory is lessening, as are the number of single-family sales. Both numbers dropped from January to February, according to the Greater Hartford Association of Realtors.

Any additional Pratt & Whitney job growth – and 846 Hartford-area positions were listed on the company’s careers web page on March 23 – combined with some growth in other sectors could make Hartford a major player in the apartment market this year.

Dave Sorter

Dave Sorter

Journalist

Dave Sorter is an award-winning journalist who spent 30 years as a newspaper reporter and editor before joining Axiometrics. He oversees all Axio blogs and newsletters and serves as senior editor of all Axio publications.

Javascript is not enable. This may affect content rendering. You can enabled Javascript in your Settings Menu.