Apartment Glut Expands: Vacancy Rate Rises to 7.8% as Unemployment Dents Demand; Monthly Rents Slip

The Wall Street Journal ^ | October 6, 2009 | Nick Timiraos

[2ndDivisionVet]

Apartment vacancies hit their highest point since 1986, surging in cities from Raleigh, N.C., to Tacoma, Wash., as rising unemployment continued to chip away at demand during the traditionally strong summer rental months.

The U.S. vacancy rate reached 7.8%, a 23-year high, according to Reis Inc., a New York real-estate research firm that tracks vacancies and rents in the top 79 U.S. markets. The rate is expected to climb further in the fall and winter, when rental demand is weaker, pushing vacancies to the highest levels since Reis began its count in 1980.

Meanwhile, the air leaving the market is driving rents down, most sharply in markets that had been chugging along until a year ago, when unemployment accelerated, including Tacoma; San Jose, Calif.; and Orange County, Calif.(continued)

[2ndDivisionVet]

Is there ANY sector of the economy that Dear Leader hasn't FUBARed??!

[dennisw]

Thanks for posting
Here is a great interactive map showing how the various states are doing in foreclosure rates and unemployment rates

http://money.cnn.com/news/storysupplement/economy/gapmap/index.htm

[rabscuttle385]

Is there ANY sector of the economy that Dear Leader hasn't FUBARed??!

Yes.

The Federal government and organized crime.

But I repeat myself.

[beckysueb]

This can’t be possible. The LSM says things are getting better. (sarc)

[LibLieSlayer]

barack hussein obama... mmmmm...mmmmm...mmmmm

LLS

[Son House]

Here’s CNN covering with that “jobs were created or saved “ nonsense, of corse the title is misleading, and they put it in the subtitle;

How many jobs has stimulus created?

The White House estimates the following number of jobs were created or saved by the Recovery Act through August 2009.

http://money.cnn.com/news/storysupplement/economy/stimulus_jobs/

Source: White House

^
Is that like the OcarterCare Plan bait-n-switch at WHiteHouse.Gov? It has little to nothing to do with the legislation, but all the ACORNS will guide the gullible to the ‘plan’

[Neidermeyer]

WE'RE #1 ,, WE'RE #1 ,, WE'RE #1 !!! Florida beat Nevada in Foreclosures by a full 1 1/2% (17.12% to 15.62%)

[raybbr]

Isn’t this counter to a failing economy? Wouldn’t more people be renting than buying homes?

[RegulatorCountry]

People in trouble are doubling up. Ever wonder why many depression-era houses had two front doors?

[mefistofelerevised]

Congratulations.

[Nahanni]

The key is in the last paragraph.

But the housing bust has also flooded some of the most overbuilt housing markets with new apartment inventory as developers have converted unsold condominium developments into rentals.

Take a look at the markets they "highlighted"-San Jose, NYC, LA area, San Francisco, Las Vegas, Miami, Raleigh, Memphis. Those places were really overpriced/overbuilt in the first place and they are also hemorrhaging people, especially places like California and NYC. With the housing surpluses in some of those areas I would guess that many are opting to lease a house instead of an apartment, too.

[ottbmare]

OK, I don’t get it: as millions of people are forced out of their homes by foreclosure, they have to go somewhere. I’d have thought that apartments would be jammed with such people. So where are they all going? they can’t all be homeless and living in shelters, can they?

[Tainan]

Funny thing. 10-15 years ago as the bubble was rising in Socal, many apartments were converted into condos. They actually overbuilt and found a better ROI by doing the condo conversion and creating gated communities.
What goes round comes round.

[dangus]

I consider falling rent rates to be a silver lining, frankly.

[Graybeard58]

This can’t be possible. The LSM says things are getting better. (sarc)

Yep, it's that "jobless recovery" they are talking about.

[Graybeard58]

Wouldn’t more people be renting than buying homes?

My thoughts too but what do we know?

[dirtboy]

That was the case at the beginning of the recession. But now folks are moving in with their parent or in group homes, and in the process leaving their old rental vacant. Also, there were plans for more rentals under development when the downturn started, and those are becoming available now.

[outpostinmass2]

rental market seems fine in my area as I own six apartments.

[fso301]

With mortgage rates so low, it makes sense that rental vacancies are up.

An FHA loan requires only 3% down which can be covered by the $8K homebuyer tax credit. Last week, 30 year fixed rate loans were below 5%

[PowderMonkey]

"Isn’t this counter to a failing economy? Wouldn’t more people be renting than buying homes?

Not necessarily. It means more people have lost jobs, given up their apartments, and returned to their parents' homes to live. Some mornings when I leave for work, I can barely make it down our street for all the cars parked there now. Most of our neighbors adult children have returned. Some have grandchildren with them as well.