The outlook is slow but optimistic
According to Reuters, CB Richard Ellis (CBRE) expects apartment vacancy rates to remain high through 2010 hovering around 7%, and rent growth is not projected to resume until 2011. Apartment loan defaults are up (second only to hotels), rental rates are declining, and vacancy rates have recently been higher in multi-family than any other sector despite prospective homeowners turning into renters as a result of the credit crunch squeezing out people who can no longer qualify.
Obviously, some cities are doing better than others, but apartment management companies across the nation are frequently adding rent incentives and creative giveaways to draw renters. In my experience (long story), 3% occupancy is acceptable and even expected but beyond that, the boss upstairs (in another state) gets antsy. Vacancy rates are expected to do a little better next year nationally, but what about your market? Is multi family thriving or diving in your area?
