Limited Supply Keeps Apartment Occupancy Tight in Providence

Limited new supply in the Providence apartment market has kept occupancy very tight, despite weak demand volumes. Over the past five years, the market added roughly 2,300 new units, expanding existing apartment inventory 1.8%, according to data from RealPage Market Analytics. That expansion pace registered well below the national average of 10.5% during the same period. Most recently, during the year-ending 2nd quarter 2024, a total of 585 units came online in Providence taking the market’s existing unit count to roughly 108,300 units. Those new units grew Providence’s apartment base just 0.5%, one of the lowest annual expansion rates among the nation’s core 150 apartment markets and well below the national average of 2.7%. These limited supply volumes have insulated Providence’s occupancy performance. As of 2nd quarter 2024, Providence was 97% occupied, the fifth-tightest reading nationally and 280 basis points above the U.S. average. Tight occupancy has given apartment operators pricing power. In 2nd quarter, effective asking rents in Providence were up 4% year-over-year. While down from recent highs, that was the 17th-biggest price hike nationally and came in well above the national norm of just 0.2%. Completions in Providence during the coming year are expected to remain around recent levels, keeping occupancy tight and providing operators with continued, though slightly less, pricing power.