Apartment Market Trends, Q2 2009
In particular, according to this data, the US apartment vacancy rate increased by 80 basis points during the quarter, as it climbed to 7.4% from 6.6% in the previous quarter and from 6.1% in the fourth quarter of 2008. Note that the average apartment vacancy rate in 2008 was 5.7%. Us apartment market trends in the second quarter of 2009 were marked by one positive development, which was the realization of positive absorption of 37,535 apartment units, in contrast to the negative absorption of 1,028 units that was registered in the first quarter of this year. However, this absorption was 48% lower than the completions of new units that entered the market in the second quarter, thus pushing the vacancy rate up. It should be noted that second quarter absorption of apartment units was higher than the absorption registered in the fourth quarter of 2008, which was also positive and totaled 12,001 units. Further, total apartment absorption in 2008 was merely 24,390 units. With rising vacancy rates at an accelerating pace apartment rents continued to fall as well at a relatively slow but faster rate compared to the one registered in the first three months of 2009. In particular, according to the data provided by NAR/TWR, US apartment rents declined by 1.2% in the second quarter of 2009, compared to a 0.6% drop in the first quarter. During 2008 US apartment rents increased by 2.9%.
The big question of course is what is going to happen in the US apartment market in the months and years ahead. Will the apartment market trends registered in the second quarter of 2009 continue in the second half of this year and in 2010, or there will be a reversal of these trends by the end of the year?
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