Posted by: Prashant Gopal on July 08, 2009
You’d expect with job losses rising and so many Americans losing homes to foreclosure, rental buildings would be filling up with folks who can no longer afford to be homeowners. Instead apartment vacancies in the second quarter rose to 7.5% — the highest percentage for that period in 22 years, according to today’s apartment market report from Reis.
It seems that people are moving in with friends and family, or are finding roommates.
Effective rents, which include concessions, fell 1.9% from a year earlier and 0.9% from the previous quarter.
Spring is normally a good time for landlords to find new tenants, so the vacancy increase is particularly distressing for apartment owners.
San Jose, San Francisco, Las Vegas, Orange County, and Seattle had the worst effective rent drops for the quarter, according to Reis. Birmingham, Chattanooga, Louisville, Norfolk, and Syracuse had the highest rent increases.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.