Here on Doom, we’ve talked a lot about there being too many houses out there. Houses aren’t the only excess commodity in the market, though. There are too many apartments as well: [Thanks L!]
NEW YORK (Reuters) – The vacancy rate for U.S. apartments hit a three-year high in the first quarter and asking rents dropped the most in at least 10 years as the number of excess apartments on the market ballooned, according to real estate research firm Reis Inc.
And the figures are forecast to get even worse as more apartment buildings are expected to open this year, increasing supply, and as the U.S. employment picture gets uglier, Reis said.
Job creation is the No. 1 driver of demand for apartments.
"Given that things are weakening right now, any new buildings that come on will add additional pressure to landlords," Victor Calanog, Reis director of research, said.
Both increasing vacancies and lower rents will put financial pressure on landlords. This will cause rising defaults, which will negatively impact lenders.
Single family housing and condos were the start of the housing market downturn. Apartment and office vacancies will drive the next leg down.
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take I-17 up to anthem and you’ll pass entire empires of brand new apartments??? who’s moving into these places??? better yet…who’s building these complexes?