Vacancy rates for apartments have reached their highest level in 30 years, according to a report issued this week by real estate research firm Reis, Inc. For the final quarter of 2009, the national vacancy rate stood at 8 percent. Compare that to 5.5 percent in the third quarter of 2006, when vacancy rates bottomed. That’s a 45 percent spike in just over three years.
While the record vacancy rate is bad for landlords and a dismal commentary on the state of the economy, the silver lining is the opportunity it spells for renters. Landlords are lowering rents and offering incentives to entice prospective tenants. See our article D.C. Apartments Roll Out the Move-in Incentives for examples of the deals currently being offered in the D.C. area.
Speaking of D.C., it was actually one of only six markets that saw rents rise or stay flat in 2009. Still, the market is softer here than it has been for years, so local renters should feel emboldened to push for perks and deals.
It may seem counter-intuitive that the rental market is hurting at the same time the housing market is still so weak. After all, if fewer people are buying homes, wouldn't that mean more people are renting? The culprit is joblessness; in an environment such as this, all people -- buyers and renters -- try to save on housing costs.
"Household formation rates slow down during recessions," Reis's economist Ryan Severino told CNN. "[Renters] may move in with their families or rent larger apartments and partner up with friends. They partner with others much more then they do during more prosperous times."
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