Even though the housing market may be showing some good signs, the rental market is still tight:
Reis’ fourth-quarter data showed that apartment vacancies around the country continue to tighten. They’re at 4.1 percent. For renters, it’s only getting tougher and tougher…
New Haven, Conn., moved into the No. 1 spot with the lowest vacancy rate, 2.2 percent. It was followed by San Diego, San Jose, New York City and Buffalo, all of which had vacancy rates of 2.7 percent or tighter.
Elsewhere around the country, the middle of the pack still had tight markets: Chicago (ranked 30th) and Baltimore (33rd) were among those that had 3.7 percent vacancies; Los Angeles (18th) had 3.1 percent; Dallas and Orlando (58th and 60th, respectively) had 4.9 percent vacancies.
Shouldn’t this lead to the construction of more units?
Though we’re at a 4 percent vacancy rate — incredibly low, by historical standards — construction is just at its historical average.
But we’re just now seeing an increasing ramp-up of construction activity. In the third quarter, we saw about 42,000 units completed, the most that we’ve seen on a quarterly basis since 2003.
Rental demand may be high – and some are predicting long terms upticks in renting due to this economic crisis which will scare people away from owning – but it sounds like the economy is still not strong enough to support a lot of new construction. What will it take to start providing significantly more rental units?