Preliminary Trends – Reis Publishes Q2 Data Aug. 1, 2012
REIS - The strong performance of the apartment sector continued unabated in the second quarter of 2012 as national vacancies fell by another 20 basis points to 4.7%. For two consecutive quarters the national vacancy rate has been marching below the benchmark 5% level used as a heuristic by apartment landlords for rent increases when the market tightens.
Net absorption remained relatively strong, with 25,540
units leasing up. This represents a slowdown from the first quarter’s
net absorption of 34,448 units, but the moderation in vacancy
compression is not unexpected. When the market tightens and vacancy
reaches very low levels, landlords shift their strategy for growing
revenue from vacancy decline to accelerating rent increases. As a result, national asking and effective rent growth
have started to accelerate. With availability scarce, landlords have
little incentive to offer concessions, and the gap between asking and
effective rent levels continue to narrow quickly. For some metro
specific trends, check out the latest WSJ article citing preliminary Q2 data from Reis.
