Rising Vacancy Rates Could Indicate Trouble Ahead
Digested from U.S. apartment vacancy rate rises in third quarter
Reuters (10/1/15) Vijayaraghavan, Abinaya
Although new construction fell slightly from the second quarter, vacancy rates rose to 4.3 percent from 4.2 percent, according to a report by the real estate research firm Reis Inc. This could indicate difficulty leasing up new apartment buildings in the years ahead.
More than 51,000 units came online in the second quarter, while nearly 41,000 were built in the third quarter. Landlords in some markets are beginning to offer concessions, such as Uber gift certificates, free rent and free parking.
Still, asking and effective rents both rose 1.3 percent, the report said, with New York City apartment homes fetching the highest average rent at $3,400 per month. And the vacancy rates are still below the historical national average of 5.5 percent, with supply expected to lag expected inventory for roughly 13 years.