Young people are typically the flat-dwellers. However, with high unemployment rates hitting across all age brackets, more and more people are displaced from their dwellings. Apartment vacancies are at near record highs.
Real estate research firm, Reis Inc, reports that the national vacancy rate is now at 7.5% – an increase of 1.4% from last year. That’s its highest peek in 22 years. Record high stands at 7.8% from way back 1986.
he vacancy rate for U.S. apartments reached its highest level in more than 20 years in the second quarter and could soon exceed record highs if the recession persists, real estate research firm Reis Inc said.
Reis director of research, Victor Calanog, also said that given the trend, vacancies can reach (or even breach) the record. The rate from the second-quarter is 0.20 percentage point higher than the first quarter.
The U.S. recession has taken a toll on the U.S. apartment market, which largely relies on employment growth to fuel demand. Its largest tenant group, 18- to 24-year-olds, has been hardest hit by rising unemployment. Meanwhile, the apartment buildings sector has led all commercial real estate categories on loan defaults.
When people lose their homes, the next option is to get another place to rent. Apparently, apartments aren’t their contingency. Now this just raised the big question of where are all displaced individuals and households heading?
Source: CNN
