The vacancy rate for apartments in the US fell to a 10 year low at the end of 2011. According to Reis, Inc., the vacancy rate fell to 5.2%. That rate is down from 6.6% a year ago.
And as the supply of available apartments decline, guess what goes up? You got it, rents! The average monthly rent for the US as a whole increased 2.3% over the past year to just over $1,000.
If you are planning on going to Yale University in New Haven, CT, start shopping early for a place to live as they had the nation’s lowest vacancy rate. New York City, Minneapolis, Portland Oregon and San Jose California rounded out the top five.
California took the top two spots for effective rental rate increases. San Francisco and San Jose were number one and number two with Chattanooga, TN, Austin, TX and New York filling in the top five slots.
Jobs are the key to these rent increases. Both San Francisco and San Jose are seeing new jobs in the tech sector, while Randy Shelly with the Chattanooga REIA explained to me that “he is not surprised” as the Chattanooga area has had a new Volkswagen plant come on line and an Amazon.com distribution center make plans to expand.
It seems like 2012 may be shaping up to be a good year for landlords. I can say that here in Memphis any apartment I have that becomes available has been re-rented fairly quickly in what are supposed to be the slow months of November and December. But, I have not generally been able to push rental rates up yet. What have any of you readers experienced?
UPDATE
Here is a link to an article in the Daily News which somewhat echos what I said above. Rents have been pretty much stagnant in the Memphis area as have vacancy rates according to the article. Perhaps the decrease in vacancy rates I have experienced is due to my particular sub-market.
