While experts had expected to see more apartments open up this year than the market could absorb, resulting in vacant apartments and the slowing of rising rents, construction delays due to labor shortages has caused the vacancy rate to be at 4.1 percent for both Q1 and Q2, according to Ryan Severino, senior economist for Reis Inc.
Rents have grown the fastest in the large Western markets: Oakland and Southern California, Sacramento, Phoenix, Denver-Boulder, Las Vegas and Portland, Oregon. “These areas were slow to achieve economic recovery coming out of the recession, but now are adding jobs and households at levels that stimulate considerable apartment demand,” says Willet.
Completion of apartment projects have been running 10 to 20 percent behind schedule for several quarters, and MPF does not expect the new ones scheduled to open later this year to be ready for occupancy until after Jan. 1, 2016, according to nreionline.
Demand for apartments remains strong as younger Millennials comprise the largest block of new renters, while older Millennials are remaining in apartments, even with children.
Says Willet: “There are a lot more toddlers in apartments today than was the case a few years ago … traditionally, those in that age segment have tended to leave the apartment market for single-family housing. That young urban family segment is becoming more and more important to the apartment industry’s health.”
As MHProNews understands, that is the market that could be buying manufactured homes. ##
(Photo credit: apartmentquest–new renters)
