As the housing market shows signs of undergoing a sustained recovery with prices rising and demand outstripping supply, it seems as if the apartment market is also undergoing something of a revival.
The latest figures released show that the national vacancy rate is at its lowest in the past ten years. The report, which was issued by Marcus & Millichap, shows that both rent growth and inflation are continuing to outpace the growth of customers' income; however, occupancy rates are starting to rise.
Across the whole country the national average for occupancy rates is around 95%, according to the vice-president and national director of Marcus & Millichap, John Sebree, and he believes that, like in the housing market, this increased demand will help to encourage firms to develop more properties.
"We have been in an economic slowdown and even as the economy does better, we still have a sizeable unemployment rate. But as people become employed again, the demand for apartments will increase. Also, the Echo Boomer population, which accounts for 2.4 million residents between the ages of 20 and 34, will come into the market over the next five years, so the expectation is that the market will remain healthy for the next several years" Mr Sebree said.
Rents have risen recently but as more units are constructed, Mr Sebree does not expect this trend to stay the course. He points to the fact that the effective rent growth for 2012 is around 4.5% and that it would be impractical to expect rents to rise by this much on a consistent basis.
Average rents for an apartment vary widely across the country depending on a number of factors, including the number of bedrooms and the location.
