Apartment Vacancy Rate Continues to Decline

Article by Michael Corkery Via RealEsate Journal

The nation's apartment market continues to climb out of a four-year slump, posting another quarter of declining vacancies and rising rents.

The vacancy rate for the top 67 metropolitan apartment markets in the U.S. fell to an average of 6.4% in the second quarter, from 6.6% in the first quarter, according to new statistics from REIS Inc., a New York-based real-estate research firm. Average rents also increased slightly.

It's good news for apartment owners, who have weathered years of sagging rents and mounting vacancies. Since 2001, the apartment market has been hurt by weak job growth and the flood of Americans taking advantage of low interest rates to buy homes instead of renting apartments.

Researchers say there's now a healthier balance of supply and demand. The number of apartments occupied by tenants rose by 10,103 units in the second quarter, after an increase of 3,584 in the first quarter.

A major factor driving these numbers is condo conversions. Developers are rushing to turn rental apartments into condominiums, thus reducing the rental supply. Fewer new apartment buildings are being built because most new construction is giving rise to condos.

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