Article : The Falling Apartment Vacancy Rate Is Looking Bad For Renters#1

 Tony Swanson - About the Author:

In 2009, apartment vacancies reached the highest level ever at 7.4 percent.  This high vacancy rate was attributable to many renters taking advantage of the federal tax credit for first-time homebuyers.  Many others left apartment complexes for recently available rental homes by homeowners trying to avoid foreclosure or banks converting foreclosures to rental properties.
             In 2010 the vacancy rate is expected to fall to 6.8 percent, according to the "CB Richard Ellis Group, Inc.". In addition, rents will only be down one percent from 2009.  They believe this drop, will be a result of a stabilizing job market, and renters stopping house sharing.  With the declining vacancy rate, apartment complexes will stop using incentives to attract tenants, like free parking and amenities.
             If the job market and economy continue to improve, the National Association of Home Builders is expecting apartment housing shortage in the middle of next year through 2014.  They believe this shortage will be the result of the multifamily construction business having been severely impacted by the credit crisis. The chief economist for the NAHB, David Crowe, said "The vacancy rate for apartments is elevated now, but as the economy recovers and jobs return, the people who have been doubling up with relatives and friends will want a place of their own, and there may not be one available." In addition, the continued decline in home ownership will add to this problem.

Along with falling vacancy rates, the NAHB believe that rental rates will rise as high as 10 percent in 2011 and 2012.  This rising rate, will be a great benefit to multi-family unit owners, but bad for renters.