The U.S. multi-housing market vacancy rate is expected to hold steady at 5.5% in 2012 and decline to 5.2% in 2013, according to a new analysis from CBRE Econometric Advisors (CBRE-EA), which also projects the multi-housing vacancy rate in 2011 to be 5.5% (on an annualized basis), down 60 basis points (bps) from a year ago and 190 bps from its 2009 peak.
CBRE-EA forecasts that top-performing multi-housing markets will be weighted toward areas with concentrations of high-tech employment. Over the next two years, metro areas such as San Francisco, San Jose, Austin, Denver and Seattle will be among the top-performing markets for rent growth, according to CBRE-EA, while Phoenix is also expected to be among the top performers as its rents recover from the cyclically low levels.
‘Apartment demand is benefiting from slight job growth as well as an expanding pool of potential renters,’ says Gleb Nechayev, senior managing economist at CBRE-EA. ‘With gross revenues surpassing their pre-downturn levels in the third quarter, the U.S. apartment market has entered an expansion phase. Considering the strong pace of recovery in rent and occupancy, it is not surprising that new multi-housing construction activity is also beginning to gain some momentum.
‘We expect that multi-housing completions in the U.S. will surpass 200,000 units in 2012,’ Nechayev adds. ‘While the new supply will still be well below the historical norm, the improvement in vacancy will pause until the labor market becomes more robust.’
