Real Estate Apartment Residential Rental Market driven by Echo Boomers
NAHB (National Association of Housing Builders) chief economist believes that 83 million echo boomers entering the market over the next decade is a positive demographic trend for the residential apartment rental market. This trend is going to drive the longer-term improvement in apartment fundaments. Echo boomers affected by the housing and financial crisis are going to be biased towards renting over ownership making rental properties valuable. Echo boomers are going to prefer the life of tenant to home ownership making apartment ownership valuable for landlords.
In the near term, however residential rental market is facing record vacancy rates as shown by the latest US Census bureau survey. The 2009 annualized national vacancy rate for apartments with five or more units is 13 percent. Historically the residential rental vacancy rate is around 10 percent. Overall the national vacancy rates in was 11.1 percent for rental housing. Download the US Census Bureau residential rental housing vacancy rate by clicking here and summary data by clicking here.
Besides the record vacancy rate, apartments are going to continue to face rent pressure by the competition from foreclosures and short sales that will place more single-family homes in the rental market. According to NAHB economist, more people are doubling up which is resulting in decrease in demand for apartment rentals.
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