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by Apartment Building Management Insider Housecash2U.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.

Vacancy Rate

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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  • kemmy

    Not sure what is responsible for this.I have been trying to rent one of my units since November of 2008.I reduced the rent couple times.Too much rentals on the market due to the economy may be.

  • Brooke

    In my opinion we all had to know that this was coming. I see how some would think that because people are lossing their jobs that they would move into a more affordable apartment. This obviously is NOT the case. The majority of the applicants I have seen in the last quarter have been;
    1. Fresh out of Bankruptcy or Forclosure
    2. Down to one income; spouse lost a job
    3. New on the job; still a “Temp”; moved to make more money.
    4. Concerned about layoffs and looking to down-size.

    #4 is probably not a bad idea, however smart, lets face it the prospective tenant pool has really dried up!
    You see rents drop REALLY fast when you need to discount to fill your vacant units because there are no “Qualified” renters in sight.

    THEN….you have the tenants that are Moving Out. They are being forced to go;
    1.BACK HOME with the parents.
    2.or worse….moving in with the In-laws!!!
    You get the picture. I can’t tell you the number of people, of all ages, who are moving because they;
    1. Have lost their job.
    2. Moving to find a new job.
    3. Moving to save; because spouse lost job.
    This is just sad, not to mention extremely scary.

  • sergio

    It doesn’t make sense why the vacancy is increasing and rents going down. I read in the papers that a lot of people lost their homes due to lost jobs etc. Where did these people go?

  • I Liked it!! Brief and to the point… Verty informitive… Thank you

  • Mary Phillips

    For Kemmy: you are correct in saying it is hard to rent since November 2008 I have a senior community and have the same problem. I have had to run some move-in specials like:
    $100.00 off 1st two months rent,
    $100.00 gift card from Wal*Mart,
    We will pay the deposit for utilities,
    1/2 off the first months rent;
    sometimes these can be costly to the owner, but if you look overall worst case $500.00 move in special or $4,920.00 rent loss for the year.

    I know even the senior community is getting hard to rent at this time, but most people these days looking in the past I have been in property management for 17 years and folks don’t move in the winter months. I have lost some of my seniors to their family members because they just simply can’t make it on their own so the next thing is moe i with family. I remember going through this back in the 80’s and ended up renting to two families in the same unit just to fill my vacancies. As I stated before look in the paper in your area and see what the move-in specials and try to beat what they offer. Just keep your head high and we will pull out of this mess, keep your faith and we will be fine.

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