Apartment rents weaken and vacancy rates diverge
March 1, 2010
Apartment vacancy rates diverged again in the fourth quarter of 2009. The U.S. Census Bureau vacancy rate for all rental apartments (in buildings with 5 or more units) declined to 12.5 percent, the first drop in the rate in five quarters. The MPF Research national vacancy rate for investment-grade apartments increased to a record 8.2 percent. That is a rise of 30 basis points (bps) from last quarter and 70 bps from last year. The vacancy rate remained at 7.1 percent in the West but increased to record highs in the South
(9.6 percent) and the Northeast (6.2 percent). Although not a record, the vacancy rate also increased in the Midwest (to 8.2 percent).
Apartment rents measured by public and private data sources showed continued weakness. Store rents for professionally managed apartments tracked by MPF Research declined by 4.1 percent this quarter. Rents continued to decline in all four regions for a fourth straight quarter. The West continued to have the biggest decline in rent growth at -6.2 percent. Only in the Midwest did the pace worsen; in all other regions, rent declines were lower than in the last quarter. The CPI rent index, which covers all rental housing, showed rents rising by 0.9 percent. Even so, this was the second straight record for lowest year-over-year rent growth.
About the Author: Bob Cain
Some 30 years ago Bob Cain went to a no-money-down seminar and got the notion that owning rental property would be just the best idea there is for making money. He bought some. Trouble was, what he learned at the seminar didn’t tell him how to make money on his rental property. He went looking for help in the form of a magazine or newsletter about the business. He couldn't find any.
Always ready to jump at a great idea, he decided he could put his speaking and writing skills to work and perform a valuable service for other investors who needed more information about property management. So Bob ferreted out the secrets, tricks and techniques of property management wherever he found them; then he passed them along to other landlords.
For over 25 years now, Bob has been publishing information, giving speeches, putting on seminars and workshops, and consulting for landlords on how to buy, rent and manage property more effectively.