Nationwide Decline In Apartment Rents & Occupancy

According to RealFacts, rents decreased across the entire U.S., with occupancy dropping from 92.9% to 92.2%.

Read about the decline in apartment rent .

According to a January 15, 2009 report by Reis Inc.: “The apartment sector was not spared from the weakness and volatility that pervaded the US real and financial economies in the fourth quarter of 2008. Net absorption for the fourth quarter turned negative, with the market giving up over 13,000 apartment units, and pushing the national vacancy rate to 6.6%”.

www.reis.com/index.cfm

This is another indicator that retaining the residents we have must be a number 1 priority. As occupancy drops and application volume decreases, it is going to be more challenging to fill those vacant apartments. Keep focusing on the basics: take thorough work orders so maintenance can excel, ensure you ask for and update current contact information (including email)at every resident interaction so that communication is easy, respond to calls and emails same day. These are the things that close the back door!

As an apartment locator and ILS, I'm often asked who are biggest competitor is. It surprises everyone that it is not another locator, ILS, or apartment community that we don't list. Our biggest competitor is the private owner. I hear this from leasing agents as well. We're fighting to keep renters in apartments as prices are undercut by the negotiable rates of the private owner.

People generally are not buying yet which means demand for rentals should increase. Do you think the decrease has to do with the number of available privately owned rentals added to the market?

Hi Brandon!

I agree, I am constantly competing with private owners, you can rent a house and townhomes now for cheaper then a 2 bedrooms and some are offering utilities included...

Also with newer communities lowering their prices too much, it screws me over big time with a more mature community.

From where I sit, the biggest issue with competing with private renters is not only the price differential - it's the lower credit requirements. Private renters make it EASIER for prospects to rent because they are reducing the number of requirements (credit app., income, deposits, etc.)
Difficult to compete and still cover liabilities. Foreclosures, income requirements, security deposits, pet deposits, etc... all go in their favor. May cost them more in the long run, but the immediate effect is EASY on the prospect.

I think the underlying reason we compete with the shadow market is that single family homeowner displaced by job loss and or foreclosure are comfortable in the environment. That is to suggest that once they are forced into to making a move - they look first to what they are use to. They like the lifestyle and comfort that is afforded to them in a single family home so they rent a like kind place.

You are right. Section 8 tenants calling me and asking if it is a single family house.