Apartment Vacancy Rates Jump to Over 7% in 1Q 2009
- Apr 28, 2009
By Anuradha Kher, Online News EditorWashington, D.C.–National vacancy rates for rental housing in the first quarter of 2009 were 10.1 (+ 0.4) percent, according to the latest figures released by the Census Bureau. Meanwhile, apartment vacancy rates for the same time period stood at 7.2 percent, Grub and Ellis found. The overall rental vacancy rate was not statistically different from the first quarter 2008 rate or the rate last quarter (10.1 percent each), whereas the apartment vacancy rate saw a big increase from 6 percent in the first quarter of 2008 to 6.6 percent in the fourth quarter of 2008.“First quarter vacancy rates increased across the four core property types,” Bob Bach, senior vice president and chief economist at Grubb & Ellis, tells MHN. “The drivers of demand for each property type, though slightly different, all weakened in response to the recession.” According to Bach, commercial real estate leasing activity tends to lag the broader economy, meaning that if the economy begins a tepid growth cycle by the end of 2009 (by no means a certainty), commercial real estate may not follow until perhaps the second half of 2010 or 2011. “Because the labor market may be the last economic indicator to recover, the apartment market, which relies on job creation to stimulate tenant demand, may bottom out somewhat later,” says Bach.In other findings by the Census Bureau, the first quarter 2009 vacancy rates inside principal cities (10.6 percent) was higher than in the suburbs (9.5 percent), but not statistically different from outside Metropolitan Statistical Areas (MSA’s), 9.8 percent. The rental vacancy rate inside principal cities was higher than the corresponding rate one year ago, while the rate in the suburbs was lower. The rate outside MA’s showed no statistical change from the first quarter 2008 rate. Among regions, the rental vacancy rate was highest in the South (12.9 percent) and lowest in the Northeast (6.9 percent).