A Closer Look at Hutchinson’s Multi-Family Market: A Case Study

In the ever-evolving landscape of real estate, staying ahead of the game is crucial. For investors and enthusiasts alike, understanding the market’s pulse is the key to making informed decisions. Today, we delve into the Hutchinson multi-family market, a market with intriguing statistics and a promising outlook. So, fasten your seatbelts as we embark on a journey through numbers and trends, exploring what makes Hutchinson’s real estate scene tick.

Vacancy Rates and Trends

Let’s start with the basics: vacancy rates. As of the latest data, Hutchinson boasts an impressively low vacancy rate of 1.9%. Over the past year, this figure has decreased by 0.6%. That’s a clear sign that Hutchinson’s multi-family market is on the rise.

Now, let’s break down this market into segments. The 4- & 5-Star segment, known for its high-end offerings, stands tall with a mere 1.5% vacancy rate. These units command an asking rent of $1,223, demonstrating strong demand. Interestingly, this category currently has no new units under construction, delivering a sense of exclusivity.

Moving on to the 3 Star segment, which has a slightly higher vacancy rate at 2.1%. With an asking rent of $907, it’s an attractive option for many. Similar to the 4- & 5-Star category, there are no absorption, delivered, or under construction units here either.

Finally, the 1 & 2 Star category, with a whopping 1,024 units, maintains a 2.0% vacancy rate. These units offer affordability, with an asking rent of $774. And yes, you guessed it, no new developments here either.

Rents and Sales

Rents in Hutchinson’s multi-family market are averaging around $930 per month, marking a 1.4% increase from the previous year. Over the past three years, rents have cumulatively grown by 9.8%, demonstrating the market’s steady upward trajectory.

When it comes to sales, there’s been a total of 12 sales in the past three years, trading for approximately $20.7 million. The market cap rate is currently at 7.5%, moderately above its trailing three-year average of 6.9%.

Market Overview

Now, let’s step back and take in the bigger picture. In total, Hutchinson’s multi-family market encompasses 1,645 units with an overall vacancy rate of 1.9%. The average asking rent hovers around $927, with an effective rent of $923. Remarkably, as of the current quarter, there are no new units under construction, no units absorbed, and no units delivered in the market. It’s like a calm before the storm, hinting at potential developments on the horizon.

Annual Trends

A year-over-year vacancy change shows a decrease of 0.6% in the current quarter, signaling improved occupancy compared to the previous year. Absorption units have been somewhat sluggish, with only 8 units absorbed over the past year, below the historical average. Delivered units also remain at zero for the same period, deviating from the historical average. However, there have been no units demolished, aligning with historical averages.

Looking Forward

As we look to the future, the forecast average rent growth is projected to be 3.4%, indicating a potential increase in rental rates. While sales volume over the past year stands at $1.7 million, lower than the historical average, the market has shown its capacity for ups and downs, with a peak in 2020 Q3 and a sales trough in 2023 Q1.

To conclude, Hutchinson’s multi-family market is a tale of steady growth and untapped potential. With low vacancy rates, increasing rents, and a lack of new construction, it’s a market worth keeping an eye on. As investors and enthusiasts alike continue to navigate the world of real estate, Hutchinson’s story is one that promises intrigue and opportunity.

Highfield Apartments

In the ever-evolving world of real estate, Hutchinson stands as a promising destination for those seeking growth and opportunity. Whether you’re a seasoned investor or a curious observer, this market is one that’s well worth exploring.