Fewer vacancies, higher rents
The Market Tightness Index, which examines vacancies and rents, rose to a record 90 from 78 last quarter. … Almost four in five respondents (79%) said markets were tighter (lower vacancies and/or higher rents) and—for the first time ever—not a single respondent thought conditions were looser.
According to NMHC Chief Economist Mark Obrinsky,
“The apartment industry rebounded strongly in 2010 as demand for apartment residences outpaced the sluggish recovery in the job market nationally. These results show the apartment industry continues to do well even though the nation’s overall rate of economic growth has slowed. This is driven largely by the increased appeal of renting generally but also by the large number of young people entering the housing market for the first time—and young people are much more likely to rent than buy.”
… And, if you are wondering if rental conditions are likely to improve anytime in the near future - the answer is ‘not likely.’
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And the good news…
With falling vacancy rates and rising rents, the number of new construction multi-family starts should pick up sharply this year which will lead to a positive contribution to GDP and payroll jobs for construction in 2011, the first positive contribution for either since 2005.
