U.S. apartment vacancies hit 23-year high

Apartment vacancies hit their highest point since 1986, surging in cities from Raleigh, N.C., to Tacoma, Wash., reports the Wall Street Journal.  The U.S. vacancy rate reached 7.8 percent, a 23-year high, according to Reis Inc., a New York real-estate research firm that tracks vacancies and rents in the top 79 U.S. markets.

For landlords, unemployment dampaned the usual summer surge.

In New York City, however, the vacancy rate fell to 2.9 percent in the third quarter from 3 percent in the second as the end of summer brought an influx of tenants signing leases, according to Reis Inc. in a Bloomberg story. 

Rents down, a “cold winter” is seen for landlords

While many landlords and property owners assumed that the traditional flurry of activity would allow them to unload much of their excess inventory and raise prices, writes the Real Estate Group of New York in its latest monthly report, “this has not been the case.”  The report on August rents continued:

“In fact, we’ve observed that many of the landlords and property managers who were eager to test the market by increasing prices and removing incentives from their units saw quickly that these tactics were premature.”

While activity has increased, the numbers have not shown significant improvement. Rents have stabilized, but at levels nearly 10% back from already depressed 2008 numbers. And although vacancies showed improvement this month, they have yet to establish the trend necessary to absorb the considerable amount of excess inventory that is continuing to depress the market.

The tables below distill the findings, but the tables are hard to read here, I know.  You may want to check them out in a PDF from the source.

These tables from the Real Estate Group of New York tell the whole story.

As Manhattan heads towards the traditionally slower winter months, it seems unlikely that the market will rebound in 2009, the report says. It goes on:

August rents dropped as much as 10% in a year

The residential rental market has continued its lackluster trend, according to the Manhattan monthly market report for August from the Real Estate Group.  While summer is typically a booming rental season, this year’s hottest months didn’t do much to help landlords.

As landlords choke, Manhattan renters can cheer

Rents are falling, according to one brokerage's latest report.

The numbers above speak for themselves with regard to the current rental situation.  As shown, the greatest change in the last 12 months has been in doorman one-bedroom units, for which rents tumbled 10.34% on average.

The statistics were compiled by the Real Estate Group, which commented:

Start spreading the news that rents are declining

If you can make it here, so the song goes, you can make it anywhere.

Well, making it here means you still have to spend a wad on housing, whether buying or renting somewhere to live.

The latest news is that doorman units in Manhattan are down 6.92 percent and non-doorman units are down 3.62 percent since May of 2007, according to the Real Estate Group of New York.  A two-bedroom apartment in a doorman building in Manhattan now averages $5,112 a month.  If you think that’s a lot – I do and will have much more on this topic in my bi-weekly newsletter on Friday – be glad that the sum is 4.53% lower than it was a year ago.

Another brokerage that also specializes in rentals, Citi Habitats, reported yesterday that average rent for all Manhattan apartments in 2008 was $3,679,