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Report: U.S. Multi-Housing Vacancy Rate Expected To Hold Steady In 2012
BOSTON -–The U.S. multi-housing market vacancy rate is expected to hold steady at 5.5% in 2012, according to a new analysis from CBRE Econometric Advisors (CBRE-EA). CBRE-EA forecasts that the multi-housing vacancy will decline to 5.2% in 2013.
The multi-housing vacancy rate in 2011 is projected to be 5.5% (on an annualized basis), down 60 basis points (bps) from a year ago and 190 bps from its 2009 peak.
“Apartment demand is benefiting from slight job growth as well as an expanding pool of potential renters,” said Gleb Nechayev, Senior Managing Economist, CBRE-EA. “With gross revenues surpassing their pre-downturn levels in Q3 2011, the U.S. apartment market has entered an expansion phase. Considering the strong pace of recovery in rent and occupancy, it is not surprising that new multi-housing construction activity is also beginning to gain some momentum. We expect that multi-housing completions in the U.S. will surpass 200,000 units in 2012. While the new supply will still be well below the historical norm, the improvement in vacancy will pause until the labor market becomes more robust.”
“The third quarter is traditionally the strongest, but even after adjusting for seasonal effects, the market is essentially back to normal now,” added Mr. Nechayev. “There is still a fairly wide variation in market conditions, however, with rents still flat or even down slightly in some areas and rising by almost 15% in others.”
CBRE-EA forecasts that top-performing multi-housing markets will be weighted toward areas with concentrations of high-tech employment. Over the next two years, metro areas such as San Francisco, San Jose, Austin, Denver, and Seattle will be among the top-performing markets for rent growth. Phoenix, a metropolitan region that was among the hardest-hit by the housing bust, is also expected to be among the top performers over a two-year horizon, as rents recover from the cyclically low levels.
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