Many Pittsburgh landlords have hung out "no vacancy" signs at their apartment buildings.
For the first time in many years, they have 100 percent occupancy.
The high occupancy is a direct result of the mortgage crisis and tighter credit standards that has eliminated many buyers from purchasing homes, landlords say. Some cite the usual influx of recent college graduates and transfers of out-of-towners with new jobs to Pittsburgh.
One of the fully leased complexes is the 297-unit Cork Factory in the Strip District.
"Occupancy has been strong at the Cork Factory the past year, hovering in the high-90 percent range, but this is the first time we reached 100 percent," said Debbie Roberts, general manager.
She has initiated a waiting list that now exceeds 20.
Jeremy and Allison Novotney are among the reasons for the full house.
They were among the last tenants to lease an apartment at the Strip District complex, where occupancy reached 100 percent about four weeks ago.
The couple relocated to Pittsburgh from Hawaii after Jeremy obtained a position with Eaton Corp.
"We researched Pittsburgh prior to moving here, and liked the Strip District, and decided it was more economical to rent than to buy, so we settled on renting at the Cork Factory," said Allison, 27.
"We'll probably consider purchasing a home in about three years," she said.
Full occupancy reigns at many other apartment complexes in Pittsburgh and surrounding communities.
Some are the 267-unit Heinz Lofts on the North Shore; the 24 apartment buildings in the city operated by Mozart Management that totals about 1,000 units; many of the buildings owned or managed by Lincoln Property Co. that total 2,700 units; the 50 units owned by Steve Worobe of Middleton Realty in Mt. Lebanon and in the Edgewood/Swissvale area; and the 800 units in the city managed by Meyers Management.
"We were amazed that we obtained the full occupancy because it came at a time we instituted the highest rental increase," said Don Gross of Meyers Management. The last unit was leased three weeks ago and "now we are turning people away because we have no vacancies."
A lot of the rentals are to young professionals and college students in and around the Oakland area, he said.
Worobe, president of the Apartment Association of Metropolitan Pittsburgh, said his members are reporting higher occupancies this summer and that there seems to be more renters out there because of the tightened mortgage criteria. His 50 units, spread between Mt. Lebanon and the Edgewood-Swissvale communities, are all leased with the last lease signed Aug. 14 and the tenant moving in on Aug. 20.
According to a National Association of Realtors, the apartment vacancy rate for the Pittsburgh-area market was expected to be 3 percent in the 2008 second quarter. That ties Pittsburgh with Newark, N.J., and Salt Lake City, Utah, for the lowest vacancy rate in the nation, said spokesman Walter Molony. The nation's average occupancy rate for the same time frame was expected to be 5.4 percent, Molony said.
Richard Moody, chief economist and director of research for Mission Residential LLC in Austin, Texas, said Pittsburgh avoided the home building excesses seen in many markets in recent years and is feeling the impact of tighter mortgage lending standards and the credit market turmoil. Both support demand for rental housing. Another trend is that demand for housing close to urban downtowns or close to transportation hubs has been rising rapidly. As a result, properties in such areas have lower vacancy rates.
A report by Torto Wheaton Research of Boston placed the Pittsburgh region's apartment occupancy level at 97.1 percent in 2007, and forecast an increase to 97.5 percent this year. Average rental prices per apartment unit has been increasing in recent years, rising from $771.89 in 2000 to $820.05 last year, the report said. Torto Wheaton is a unit of CB Richard Ellis.
The high occupancy levels in Pittsburgh plus the stability of its apartment rental market has brought many out-of-town investors here looking for apartments buildings to buy as investments, said Cynthia Kamin, senior vice president, CB Richard Ellis/Pittsburgh.
"With our occupancy level at 98 percent, it's no wonder that 70 percent of apartment building sales here are to out-of-town investors," she said.
Frank Bercelli, general manager of Amore Management Co., which began marketing the Heinz Lofts in 2005, said fully occupancy occurred several months ago. Many of the new tenants are those who were unable to qualify for a mortgage to buy a house, and professionals who were brought into the region by companies to undergo two or three years of training.
The Heinz Lofts are not the only apartments experiencing full or high occupancy, Bercelli said. "Of the 2,400 apartment units we own or manage, the average occupancy rate is about 93 percent." All but 300 units are in Allegheny County, with the remainder in Beaver County or out of state.
Mozart enjoys 100 percent occupancy in its buildings because of its unique location, said Frank (Skip) Schroeder, general manager.
"Our valued-priced buildings are in the areas that include the medical centers and universities," Schroeder said. "In February, we may list 400 or 450 potential vacancies ... but by Aug. 1, they are usually leased," he said.
Arbors Management Inc. of Monroeville handles affordable apartments along with rentals in private homes where owners have one, two or three units available.
"Of the 30 apartments with 2,600 units we manage, 27 are fully leased," said Patty Recklitis, president and director of Arbors' affordable housing division.
Arbors owns or manages 2,500 single-family houses, duplexes, three-unit and four-unit properties that are owned by investors. Of these, about 90 percent are leased, said Thomas Wagner, vice president, who handles that portion of the business.
Lou Goodwin, property manager at Brandywine Agency in North Versailles, said about two of its apartments in Westmoreland County, the 36-unit Markvue Manor is fully leased, while the 51-unit Kensington Arms in New Kensington, has only one unit left to lease.
