One area of US housing is fully recovered -- apartments

5 Apr 2012 by Jim Fickett.

Calculated Risk regularly posts quarterly data from REIS on apartment vacancy rates. The most recent graph is quite long-term, going back to 1980. It is clear from this graph that the current vacancy rate is average-to-low compared to the range for the last three decades:

In fact, not only is the apartment market recovered, we are getting into the next boom phase:

for most markets, once vacancies tighten below 5%, effective rents tend to spike as landlords perceive that tight market conditions allow for greater pricing power. …

Risks may manifest later in the year, however. With multifamily remaining one of the few shining starts in commercial real estate, developers have begun building properties to take advantage of rising incomes. Unless there are delays, Reis expects about 70,000 units to come online in 2012. That is about double the rate of supply growth in 2011.