Virginia Beach Outperforms Other South Region Apartment Markets

The Virginia Beach apartment market has outshined in recent years, ranking as the only South region market among the nation’s top 10 for both occupancy and rent change.

Virginia Beach was the only major South region market to rank among the national leaders for occupancy in August. Occupancy was at 96.8% in Virginia Beach in August, according to data from RealPage Market Analytics. Among the largest 50 U.S. apartment markets, Virginia Beach tied with San Francisco in the #3 spot, just behind Newark and New York. Occupancy in Virginia Beach was well ahead of the next-best South region market on the top 50 list, which was Washington, DC, with a rate of 95.8%.

Solid apartment demand and limited supply in Virginia Beach has helped push occupancy ahead by 320 basis points (bps) in the past 10 years. During that same period, the South region of the U.S. saw occupancy drop 20 bps, while the nation overall saw an increase of 10 bps.

With occupancy ranking well nationally and pushing forward notably, rent growth in Virginia Beach has also been solid. Effective asking prices were up 2.2% in the year-ending August, ranking the market #9 for rent growth among the nation’s largest 50 apartment markets. The next-best South region market – Baltimore – came in at #18 on that list, with rent growth of 1%. In contrast, rent cuts were the norm during the past year in the U.S. overall (-0.2%) and the South region (-1.7%).

Helping apartment fundamentals in Virginia Beach, new deliveries have been limited in recent years, especially compared to some other South region markets. The existing inventory base in Virginia Beach increased by just 5.4% over the past five years, less than half the growth rate for the U.S. overall (11.5%) and about one-third the expansion pace seen in the South region (15.5%).