The multifamily sector continued its torrid run as vacancy rates fell by 30 basis points in the first quarter down to 4.9 percent, according to real estate research firm Reis Inc. The last time the vacancy rate was this low was more than 10 years ago in the fourth quarter of 2001.
According to Reis, “It is also significant to note that national vacancies have improved beyond the benchmark 5 percent level used as a rule of thumb by apartment landlords: for most markets, once vacancies tighten below 5 percent, effective rents tend to spike as landlords perceive that tight market conditions allow for greater pricing power. With overall vacancies below this level, expect rent growth to accelerate even more.”
Net absorption, or the net change in occupied stock, remained strong, with 36,484 units leasing up.
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