MyNewPlace Blog

Last month, we relayed information from REIS, Inc regarding how apartment rents had decreased for the first time in 5 years in Q4 of 2008.

That report is reinforced by a recently released study by RealFacts.com, which provides “the first comprehensive assessment of the rental market in 2008."
According to RealFacts:

• Rents declined in nearly every MSA between September and December of 2008
• Nationally, the average rent dropped from $1002 in September to $993 in December
• Nationally, the average occupancy rate dropped from 92.9 percent to 92.2 percent, leaving 10,000 apartment units vacant at the end of the year
• In 2008, only 9,248 units were added to overall supply, compared with the average of 65,000 units per year for the past ten years.

The cities that experienced the greatest drops in rents were all located in the Sunbelt, mainly in California and Florida. These drops followed bursts of job growth and construction.

Many Miami and Fort Lauderdale condos that were originally built for ownership are now being converted to rentals, flooding the rental supply. Other communities, located in Southern California's Inland Empire and tech heavy South Bay area, are facing steep unemployment as well as competition from the shadow market's foreclosed home supply.

• Miami apartments (2.4 percent)
• Riverside apartments (2.4 percent)
• San Jose apartments (2 percent)

Both reports emphasize how the oversupply of rental housing options coming onto the market as well as the steep declines in employment will shape the 2009 rental market. Overall, renters are expecting to look forward to cheaper rents and better options.

Apartment managers need to focus now more than ever on filling their vacancies in the most cost effective way possible. This means keeping track of every lead so that you can use advertising resources effectively.

With competition for renters looking like it will increase dramatically, make sure you are ahead of the curve by either requesting a copy of Multifamily Marketing in the Internet Age or contact us about a customized rental trend reports for your city.

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