The U.S. multifamily housing market vacancy rate is expected to rise modestly to 5.3% in 2013, according to a new analysis from Los Angeles-based CBRE Group Inc. The increase, from a rate of 4.5% in the third quarter of this year, will be driven by new construction completions and a slight tapering off of demand from historically robust levels in recent years.
CBRE projects the sector's vacancy rate to be 5% for this year, down from 5.4% in 2011 and from 7.3% at its 2009 peak. The vacancy rate is forecast to fall back to 5.2% in 2014.
CBRE also predicts that top-performing multi-housing markets will be those with heavy concentrations of high-tech employment, such as San Francisco, Denver, Austin and Atlanta, as well as those markets where total employment has already surpassed pre-recession peaks, including Houston and San Antonio. Strong cyclical recoveries in rents are also expected to begin in some of the markets hit hard by the housing bust – including Phoenix and Orlando.
‘It is a great time to own multifamily housing properties – apartment demand is benefiting from the slowly recovering economy as well as rapidly expanding pool of renter households,’ says Gleb Nechayev, senior managing economist at CBRE Econometric Advisors.