Figures from the US’s largest cities indicate that rental property vacancies across the nation are on the decline. According to real estate analysis firm Reis Inc., the vacancy rate in the US fell nearly two percent from the first quarter of 2010.
“Rental activity during the winter season is typically slow because consumers prefer to avoid apartment hunting and moving in chilly weather. But landlords filled 44,000 more units than were vacant in the first quarter, the strongest first quarter in a decade,” reported Dawn Wotapka of The Wall Street Journal.
This decline can be attributed to a number of factors such as:
- Increased confidence in domestic economic conditions
- Improving job markets
- Decreased activity on the part of prospective home buyers
Another explanation may relate to an increasing number of foreclosures. The Wall Street Journal reported in April 2011 last month that major lenders such as Fannie Mae have been facing growing foreclosure numbers for the last several years, noting that the lender acquired 232 properties due to foreclosures in 2010.
“Unemployment of close to 9 percent and a surge in home foreclosures have pushed many people to rent, driving a rebound in multifamily properties during the past year. Construction of apartments has climbed from a 50-year low on expectations that rents will increase and more people will seek to lease,” wrote Hui-yong Yu for Bloomberg.
Certainly this market activity has had a weighty impact on renters. As the demand for apartments climbs, renters will see a corresponding increase in monthly rates and a decrease renter perks such as decreased fees and price incentives.
According to an April 6th Reuters news report, the apartment rental vacancy rate in New York City is the lowest in the US at less than three percent. Not surprisingly, the city also boasts the highest average rental rate at just under $2,800 a month. The highest vacancy rate in the nation, according to the same report, is in Memphis, Tennessee, where there is an 11 percent vacancy rate and tenants can expect to pay an average rent of roughly $600 a month.