US Apartment Market Forecast May 2009
Apartment rents in 2009 are predicted to increase despite a significant increase in the national vacancy rate. In particular, the US apartment vacancy rate is predicted to increase from 5.7% in 2008 to 6.8% in 2009, representing an increase of 1.1 percentage point. In 2010 though, the vacancy rate is expected to decrease slightly to 6.7%. The significant increase in the vacancy rate in 2009 will be the result of completions outpacing absorption. In particular, although 140,347 units are expected to be completed, only 132,959 units are expected to be absorbed. In 2010 though, absorption is expected to outpace completions. In particular, 58,649 apartment units are expected to be completed while absorption is predicted to reach 89,708 units. The NAR/TWR apartment market forecast May 2009, presents a resilient picture for the US apartment market. However, it should be noted that apartment market behavior varies widely across local markets, as well as across quality segments. So it is not unlikely that some markets will register declines in apartment rents and higher increases in vacancy rates, depending on local demand and supply conditions. Thus, the national outlook presented by NAR/TWR should not be applied to any particular locality. Investors need to evaluate carefully the prospects of the market as they pertain to the particular locality they are targeting or operating.
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