Q2 Apartment Vacancy Report
Submitted by S. Laraby
Recently released market data indicates that apartment demand has accelerated, growing to the highest level since late 2010. Vacancy rates from Q1 to Q2 remained at 4.3% driving strong expectations for the multifamily segment.
As Bill McBride of Calculated Risk Blog points out, “Over the last four quarters, national vacancies have declined by 50 basis points, a bit slower than last quarter’s year‐over‐year decline in vacancy of 70 basis points. This dynamic is somewhat to be expected ‐ as the market gets tighter and tighter, it becomes increasingly difficult for vacancy to continue falling at a high rate as vacant units, or at least palatable vacant units, disappear from the market.” As vacancy rates continue to decline YOY, rents are expected to continue to trend upwards.
CBRE notes that nationally, in 36 of the 63 markets monitored, vacancy rates have declined, while rents have increased in the vast majority of markets across the country. Markets with the largest YOY reductions in vacancy rates (100+ bps) include Greenville, Seattle, Detroit, Houston, and Newark. Cities that saw the largest YOY increase in vacancy include El Paso, Pittsburgh, Albuquerque, Salt Lake City, Fort Lauderdale, Louisville, Edison, Philadelphia, and Washington, DC.
Ryan Severino, senior economist for Reis, adds “The apartment market has been on a spectacular run, It’s been an awesome recovery since early 2010.”