Wednesday, July 06, 2011

Good News For Apartments

Here is a Calculated Risk article on Reis's apartment report.  Vacancies are down and rent is up.  Vacancies stood 6% nationally at the end of the second quarter and rents at $997 per month.  For the year earlier period, vacancies were at 7.8%, and rents were at $974.  This is a marked improvement.  Here is Calculated Risk's opinion on the impact improving rental market:
A few key points we've been discussing:
• Vacancy rates are falling fast (the excess supply is being absorbed). Note: The excess housing supply includes both apartments and single family homes.

• A record low number of multi-family units will be completed this year (2011). Only 8,700 apartments came on the market in Q1 (in the Reis survey area). This is the second lowest quarter since Reis has been tracking completions - the lowest was 6,000 last quarter.

• The falling vacancy rate is pushing push up effective rents. This also pulls down the price-to-rent ratio for house prices.

• Multi-family starts are increasing, and that will help both GDP and employment growth this year. These new starts will not be completed until 2012 or 2013, so vacancy rates will probably decline all year.
My bold and italics added in the last bullet point.  I hope Calculated Risk's right that an improving apartment market can help GDP and the employment rate.

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