Rents Show First Decline in Over Five Years
by Apartment Building Management Insider
U.S. apartment rents fell in the fourth quarter from the third as the national vacancy rate climbed to a four-year high of 6.6 percent, according to a report just published by Reis Inc., a New York-based research firm.
The report defies the expectation that apartments would benefit from the housing slump as job losses and lower wages are cutting into the pool of potential renters in their twenties and thirties.
Asking rents fell 0.1 percent from the previous quarter, to $1,052 on average, their first quarter-to-quarter decline in almost six years. Effective rents, what tenants actually paid, fell to an average $996 last quarter, down 0.4 percent from the prior quarter.
The vacancy rate rose to 6.6 percent in the fourth quarter from 6.2 percent in the third quarter and 5.7 percent at the end of 2007. The fourth quarter matched the vacancy rate in 2005s first quarter and was the highest since the fourth quarter of 2004, when it was 6.7 percent, according to Reis.
Vacancies increased in 66 of the 79 cities measured by Reis and effective rents fell in 54 markets.
The net change in occupied space, a measure of leasing known as absorption, shrank by 13,283 units.
Copyright 2009 Apartment Building Manager Insider
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