Apartment Vacancies in U.S. Rise to 22-Year High as Unemployment Climbs

[marmar]

Apartment Vacancies in U.S. Reach 22-Year High, Reis Reports
By Hui-yong Yu


July 8 (Bloomberg) -- U.S. apartment vacancies rose to their highest in 22 years in the second quarter as job losses cut tenant demand and more units came to market.

Vacancies climbed to 7.5 percent from 6.1 percent a year earlier, New York-based real estate research firm Reis Inc. said today. The last time landlords had so much empty space was in 1987, when vacancies reached 7.6 percent as the Standard & Poor’s 500 Index plummeted 23 percent in the last three months of that year.

“Vacancies continued to rise despite what has traditionally been a strong leasing period for apartment properties,” said Victor Calanog, director of research at Reis.

Job losses and falling wages are shrinking the pool of potential renters, defying forecasts that prospective homebuyers would rent rather that purchase as house prices decline. The U.S. unemployment rate rose to a 26-year high in June and U.S. payrolls dropped more than forecast in June, the government said last week.

Equity Residential, founded by billionaire Sam Zell and now the biggest U.S. apartment landlord by market capitalization, said in April that job losses made the company “cautious” and it was offering rent reductions to lure tenants.

Asking rents for apartments fell 0.6 percent in the second quarter from the first, Reis said. That matched the rate of change in the first quarter, the biggest drop since Reis began reporting such data in 1999.

Asking rents dropped 0.7 percent from a year earlier to an average $1,040 a month. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601213&sid=a5YNzreTGxLw

[MadHound]

1. I wonder how much homelessness has risen

After all, if you can't afford the mortgage, if you can't afford the rent, then where else are you going to go?

[marmar]

2. I suspect those who can are moving in with family members, friends etc....

..... but I would also guess that homelessness has spiked.

[FarCenter]

3. Demand can be pretty elastic

Singles moving in together.

College graduates moving back in with mom and/or dad.

Parents moving in with son or daughter.

There are lots of living arrangements.