Vacancy rates to decline in 2010, CBRE says.
(CBRE) reports that apartment vacancies in the United States, which hit an all-time high of 7.4 percent in 2009, will decline throughout 2010 as job losses stabilize and fewer new rental homes are added to the market.
CBRE forecasts the nation's vacancy rate to fall to 6.8 percent in 2010. Effective rents, meanwhile, will end the year less than 1 percent down from Q4 2009. In some areas, vacant apartments could fill quickly as employers begin hiring again and Americans in their 20s and early 30s give up sharing housing with roommates and parents.
To this end, AvalonBay Communities CEO Bryce Blair believes developers will have to ramp up rapidly to meet demand after cutting apartment starts by 58 percent in 2009. Manhattan, Boston, Denver, Seattle and Washington, D.C., are among the markets where rents are expected to rise.
In Boston, for instance, monthly rates are projected to climb 2.8 percent in Q4 2010 versus the same period a year earlier. Such incentives as parking and rent reductions might be boosting the Bean-town market, notes Matthew Petty, General Manager of Exit Realty Associates in Boston. Rents in the city slid 2 percent in the last three months of 2009 compared with a year earlier and should recover this year. Petty concludes, "Landlords have woken up to the fact that the economy is not as strong as it was three years ago, and rents have become more reasonable."
Source: Bloomberg, NAA's Industry Insider. March 16, 2010