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Apartment vacancy rate hits 23-year high: report
(Reuters) - The U.S. apartment market in the third quarter turned in one of its weakest performances ever as the national vacancy rate hit a 23-year high despite being propped up by landlords willing to take lower rent to keep tenants, according to real estate research firm Reis Inc.
The U.S. apartment vacancy rate rose to 7.8 percent in the third quarter, its highest since 1986, according to the report released on Tuesday. Vacancies have been rising since the third quarter of 2007, according to Reis.
The U.S. apartment market has been reeling for more than a year as its main demand driver, job growth, disappeared in the U.S. recession.
Loans on apartment buildings have led the real estate industry in defaults with hotels a close second. These types of properties have short leases and downturns show up quickly.
But the tough times for both sectors do not bode well for the rest of the commercial real estate industry, where longer leases can mask falling market rents.
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