The Housing Chronicles Blog: Apartment vacancies hit 30-year high

Thursday, January 7, 2010

Apartment vacancies hit 30-year high

Renters' market, anyone? While that already happened here in Southern California a couple of years ago, now it's swept across the country like a flu-like virus to include almost all metro areas. According to REIS, the 8% national rate is the highest they've seen since first starting to track the market. In response, landlords are lowering credit standards, cutting rents and offering incentives ranging from Starbucks cards to weeks or a month of free rent.

From a Wall Street Journal story:

The vacancy rate ended the year at 8%, the highest level since Reis Inc., a New York research firm that tracks vacancies and rents in the top 79 U.S. markets, began its tally in 1980.

Rents fell 3% last year, according to Reis, led by declines in San Jose, Calif., Seattle, San Francisco and other cities that had brisk growth until the recession...

Landlords now must entice tenants to renew leases. "We'll shampoo their carpets. We'll paint accent walls. We'll add Starbucks cards," said Richard Campo, chief executive of Camden Property Trust, a Houston-based real-estate investment trust that owns 63,000 units. He said the first half of 2010 should be "pretty ugly," but was optimistic the sector would pick up later in the year...

Landlords were also hit last year by competition from a wave of new supply that hit the market. The 120,000 units that came onto the market last year, including some busted condo projects that had to be converted to rentals, represented the most new construction since 2003, according to Reis...

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