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Welcome to the AAOA Forum, where we discuss the the topics our members want to hear and want to talk about. We like to take an active roll in the online community to help our members learn and help educate landlords new and old. We encourage you to participate and join in our discussions. Thanks.
Ouch! Bad News for the Rental Market
Vacancy Numbers May Be 2.2 Times Worse Than Reported
On Wednesday, July 8, 2009, the Wall Street Journal reported that apartment vacancies had risen significantly, to a 22 year high. This report used statistics furnished by independent research firm Reis, Inc.But a different research company, Axiometrics, Inc., reports that its findings are far worse.
Axiometrics claims superior methodology in its survey of apartment rental growth rates. It’s research includes a larger percentage of properties surveyed, as many as 20,000 surveys per month. In addition, Axiometrics compares the same properties from one measurement period to the next. The same property is surveyed both first quarter and second quarter, for instance.
Axiometrics numbers are showing a vacancy rate over two times that of the Reis study in some markets, particularly in New York, San Jose, and Fairfield County. For example, in Ventura County, California, Reis shows a rental growth rate of minus 3.6%, where Axiometrics is showing minus 8.8%.
Where Reis reports an overall vacancy rate of 7.3, Axiometrics second quarter 2009 vacancy rate appears to be closer to 8%. First quarter results showed some of the worst market conditions.
See the Axiometrics, Inc., comparison report.
The WSJ report concludes that loss of white-collar jobs is an important factor for the increase in vacancies.
See our feature, Rents Show First Decline in Over Five Years.
American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.
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[...] high if only problem tenants are calling you. In today’s market, with both the high vacancy rate and high unemployment, property managers are reporting they are getting fewer applicants. [...]
your article on apartments vacancy was very informative. I live in tennessee and i am wondering about that market.
We are in smaller (under 400,000) markets in the Southeast. While these areas have taken a hit the pain seems less intense than in some of the large markets. That said, while traffic has been good and occupancy is holding up, qualified traffic has been a struggle.
Wow! The information above just does not make sense to me.
How can this be? Single family homes are being forclosed upon every day and residential market rentals are at an all time low. ??? Where are people living? Where are they going? Does any one know?
Here in San Leandro, a city that borders on Oakland, CA… in the San Francisco East Bay… we are having a devil of a time getting qualified applicants and renting our vacant units.
Late last year we dropped our asking monthly rental amount from $1260 to $1185 for our 2/BR-2/BA units… and we are now considering dropping that amount to $1135/month.
Most recently we had “accepted” applicants putting money down to hold a unit while our maintenance crew was preparing it for their move-in, and once done (on time, I might add…) the applicants kept us waiting for 2 more weeks… and then finally pulled out of the deal altogether. They did NOT find another apartment, rather they could not get their finances together in an acceptable manner (acceptable for us, that is). They wanted to sign over 3rd party checks to us for their security deposit… as well as other questionable financial dealings… all of which were rejected by us, of course.
Now we have to start all over again… posting the unit and hanging a sign in front… I am frustrated to say the least.
Renting units used to be rather simple in that I always had a waiting list of qualified applicants for our much sought after units in the Affordable Housing properties where I was employed.
But no more!
It is taking me up to 6 months to find qualified applicants for our current units, and that is just not acceptable to me or the owner, to be sure.
I don’t know what MORE I can do to get our units filled in a more timely manner. Any suggestions???
This financial climate is almost frightening anymore.
Take care…
Marie
people are living with relatives and friends or moving to cheaper parts of the country. it took me 6 months to rent a 2/2 duplex then the tenant got sick and had to move out due to reduced income after 2 months. Most tenants have dogs, and are smokers two things I dont want in my rentals. Since rents are being reduced they are below irs guidelines so does that mean we will be taxed on average rents for the area?
Marie,
Just wanted to offer an opinion for your situation.
I’m San Diego Ca. and I found that the qualified people are buying mobile homes instead renting appartments. But, if you offer them a free month rent to move in and the ones who have good credits or “acceptable to your term” then they might think twice.
Theresa Stein
These are tough times in many markets. Maintaining current information regarding competitor pricing is critical.
Just as important is traffic. Having a strong website that effectively promotes your site. Using the internet tools available to you are big helps. For many, this kind of knowledge is difficult to amass. The obvious solutions are companies like ApartmentFinder, etc. Consider contracting with our company to manage these services for you. We providing a coordinated labor arm to perform this effort and improve your results – http://www.apartmentmarketingsolutions.com. Also, we have a free report on our site offering useful tips to improve results.
Good information. I have property in Missouri and in lower income family areas. Before I was able to rent it very easy but now all the applicants do not have the money right now or are trying to gather it together. So of course I am not renting to those types. One thing I have done that has helped is letting them move in with out the deposit instead they can make payments on their deposit.
[...] to solid growth next year without worry about rising inflation.” See our feature, Bad News For The Rental Market. American Apartment Owners Association offers discounts on products and services for [...]
[...] please review the Guide Announcement on http://www.efanniemae.com. See our feature, Ouch! Bad News for the Rental Market. American Apartment Owners Association offers discounts on products and services for [...]