The massive wave of current apartment deliveries and new apartment projects starting almost daily. Over the next for quarters the apartment vacancy rates will rise in 46 of the 54 metros according to CoStar Group study. By the end of 2015 the U.S. apartment vacancy will rise from the current 4.1% to over 5%. Along with the addition of hundreds of thousands of new units, apartment vacancies are still expected to remain near 10 year lows across most of the nation. In 2015 at least 250,000 new apartment units are expected to hit the U.S. market, including 1,500 at Brookfield’s Playa Vista master development on L.A.’s Westside. The impact of the new apartments is still on debated, because demographics and sagging single-family homeownership rates continue to work to the advantage of the rental apartment market.
Excerpts from the Article:With construction on new apartments back in full swing and vacancy rates beginning to trend upward, the robust rent increases enjoyed previously by landlords in most U.S. metro areas are expected to decelerate to below 2% in 2015 as the multifamily market shifts from full recovery into an expansion phase. CoStar Group economists are forecasting that apartment vacancy rates will rise in 46 of the 54 top U.S. metros over the next four quarters due to the massive wave of current apartment deliveries and new apartment projects starting almost daily. Citation and link:
Drummer, Randyl. “Apartment Construction Boom Slowing Rent Increases as Market Shifts Into Expansion Phase.” CoStar News., 03 Dec. 2014 Web. 08 Dec. 2014.