The national apartment vacancy rate increased for the third consecutive quarter, reported Reis Inc., New York. [paragraph] "If there were any doubts about rising vacancy in the apartment market, they should now be put to rest," said Reis Senior Economist and Director of Research Ryan Severino. "This is the first time this has occurred since the fourth quarter of 2009, when the apartment market was still struggling due to the fallout from the Great Recession."
Severino predicted the upward vacancy trend will likely persist for at least the next five years. "New construction continues to exceed net absorption by a wider margin over time, which will cause vacancy to increase in the majority--if not all--of the coming quarters," he said. "While the apartment market should still remain tight, there is clearly not a bottomless pool of demand that absorbs all of the units that are being delivered to the market."
Apartment vacancies increased 10 basis points to a still-healthy 4.5 percent during the first quarter, Reis reported.
Severino said construction exceeded demand by 10,931 units during the first quarter. "Although this difference is narrower than the previous quarter, it remains significant," he said. "With construction set to increase faster than net absorption, this difference should continue to widen in the coming quarters."
Despite increasing vacancy rates, asking and effective apartment rents grew by 0.4 percent and 0.5 percent...