Apartment vacancies rise for first time in five years
In one of the first signs that the multifamily sector’s hot run might be cooling, apartment vacancies climbed for the first time since 2009. That national vacancy rate increased to 4.2 percent during the third quarter.
The rate has been less than 5.5 percent since the third quarter of 2011, a “virtually unprecedented run,” according to a report from Reis Inc., which announced the increase in vacancies.
Though vacancy rates are rising for the first time in almost five years, the apartment sector still has demographics and a relatively strong economy on its side. The sector is not without its red flags, however, including mismatched supply and demand. Reis points out that net absorption of apartments during the third quarter was 37,233 units, while construction of new apartments tallied 46,055 during the period, a difference of 8,822.
Reis says demand has “clearly declined” from levels observed during 2010 and