Dennis Norman
By: Dennis Norman
Since the real estate downturn reared it’s ugly head many builders, developers and speculators have turned their “for sale” inventory into rentals. At the same time many frustrated homeowners have rented their homes out after not being able to sell them after buying another home.
As this happened I wondered if all that was being done was passing off the excess inventory problem of the for sale market to the rental market.
While pondering this I did realize the sad fact that the tenant population has probably increased substantially over the past couple of years a result of homeowners losing there homes and resorting to renting.
In a survey done byTransUnion it appears that my concerns may be justified. The survey finds 81% of property managers are concerned about locating reliable residents for the remainder of this year.
The survey polled more than 870 property managers across the United States and produced the following stats:
- 57% have vacancies of 5%
- 22% have vacancies of 6-10%
- 13% have vacancies of 11-20%
- 6% have vacancies of 21% or higher
As a reference, U.S. Department of Commerce data shows national rental vacancy levels between 9% and 10% sine 2003. During the end of the last recession in 2001, vacancies were 8.8% nationally.
The report does point out an interesting trend, and one that may add to the demand for rental property and that is tenants that are being forced to move as a result of the home they are currently renting being foreclosed upon.
Update: I just saw in the State of the Nation’s Housing 2009 report prepared by the Joint Center for Housing Studies the following comments regarding rentals:
- The national rental vacancy rate notched up to 10.0% in 2008 – just shy of the 10.2% record set in 2004. Multifamily buildings with 10 or more apartments posted the largest increase rising to 11.1%. In the first quarter of 2009, the rental vacancy rate remained at an elevated 10.1%
- While nominal rents rose 3.7% last year, real rents fell by 0.2%, while the real price of multi-family properties dropped in 2008 for the first time in years.
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