Apartment Rental News Roundup: We’ve Got Good News and We’ve Got Bad News

October 7th, 2009 by Matt DiChiara| Posted in Weekly News Update | 4 Comments »

The good news is that the bad news kind of helps out the apartment industry. Basically the news is good for some people and bad for others, but to the people it’s bad for, it is not news at all. And then, there is the bad news.

Census Bureau Reports Shift from Owning to Renting

Multi Housing News reports that The National Low Income Housing Council (NLIHC) recently released date from its 2008 American Community Survey, (conducted using data from 2006-2008) which showed that renters are paying an increasing percentage of their incomes towards rent. Not surprisingly the hardest hit group was families earning less than $20,000 per year as average national rents grew from $763 to $824. Additionally, the percentage of apartments under $500 fell .6 percent and, at the other end of the spectrum, apartments over $1500 a month rose 1.2 percent.

The report also indicates a fundamental shift from owning to renting since 2006, which has resulted in an increased average household size of renter-occupied units. This is a trend that we have also seen continue to the present, as search data has shown an increased demand for 3 bedroom apartments since the start of the recession at the end of 2007.

NLIHC President Sheila Crowley concisely summarized the findings, saying “More families are renting, rents are going up and the lowest income households are struggling to pay for the most basic necessities.” She also emphasizes the discrepancy between the realities of the housing world and the ‘ownership first’ policy that Congress has pursued lo these many years.

MPF Research Conducts 3rd Quarter Survey

Greg Willet’s Market Dynamics page was updated this week with data from MPF latest survey of the apartment industry. According to his analysis, vacancy rates are decelerating, even showing improvement on a quarterly basis, though he interprets this to reflect the discounts and deals that apartment owners are offering to boost occupancy rates; that national average is 92.2 percent after projections from the 3rd quarter numbers.

Geographically, occupancy rates varied expectedly, with bottom performing cities such as Phoenix, Las Vegas and Atlanta pulling down the national average. More recently, the Houston and Dallas markets are now showing occupancy softness, brought on by unemployment numbers and supply surpluses.

With rents and occupancy down, revenues are down about 7 percent across the nation and are not expected to recover until late next year.