U.S. apartment vacancies dropped to a 10-year low in the fourth quarter, paving the way for rent increases that are likely to continue this year.
U.S. apartment vacancies dropped to a 10-year low in the fourth quarter, paving the way for rent increases that are likely to continue this year, according to Reis Inc. and reported by Bloomberg.
The vacancy rate fell to 5.2 percent, the lowest since the end of 2001, the New York-based property research firm said in a report. It was 5.6 percent in the previous three months and 6.6 percent a year earlier. The average monthly effective rent, or what tenants paid after landlord giveaways, climbed 2.3 percent from a year earlier to $1,009, Reis said.
Rising foreclosures and stricter mortgage-lending standards have helped make rental housing the best-performing segment of commercial real estate for the past two years. The vacancy rate has fallen for seven straight quarters from a three-decade high of 8 percent at the end of 2009, according to Reis.
A total of 8,865 new units became available in the fourth quarter, the second-fewest for any three-month period in Reis records dating to 1999. The first quarter of 2011 had the fewest units, at 7,473.
For all of 2011, 37,678 units were completed, the lowest annual total in 31 years of Reis data. The previous record was 49,303 in 1993 during the savings and loan crisis.
Landlords saw a net gain in occupied space of 50,559 units in the fourth quarter, down from 58,238 units a year earlier and up from 36,818 units in the previous three months.
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