According to the apartment market forecast published by the National Association of Realtors (NAR) and TWR in February 2009, the US apartment market is expected in 2009 to register a significant increase in absorption of apartment units compared to 2008.
According to the data provided by NAR/TWR in 2008, the absorption of apartment units nationwide plunged from 234,399 units in 2007 to only 24,390 units, representing a dive of nearly 90%. This occurred at a time that completions of new apartment units reached 220,773 units, representing only a 4.4% decrease from 2007 levels.
In the rental market, the apartment vacancy rate increased in 2008 by o.3 percentage points, that is, from 5.4% in 2007 to 5.7% in 2008. As a result of the rising vacancy, apartment rent growth decelerated slightly from 3.1% in 2007 to 2.9% in 2008.
Apartment Market Forecast 2009
NAR/TWR predict a significant increase in the absorption of apartment units in 2009 compared to 2008. In particular, 127,523 units are expected to be absorbed in 2009, representing a 423% increase over the 2008 absorption, which was though extremely low by historical standards. That is the reason for which the 2009 absorption will be still almost 50% lower than the absorption registered in 2007, despite the significant increase compared to 2008 levels. Apartment completions in 2009 are expected to register only a small decline compared to 2007 and 2008, thus considerably outpacing expected absorption. In particular, about 214, 000 units are expected to be completed, thus exceeding expected absorption by more than 86,000 units.
In the rental market the overall vacancy rate is expected to continue on the upward path by increasing 0.50 percentage points, that is, from 5.7% in 2008 to 6.2% in 2009. As a result of the rising vacancy rate, apartment rent growth is expected to considerably decelerate from 2.9% in 2008 to only 1.7% in 2009.
Return from Apartment Forecast February 2009 to Market Watch
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