How Big Is The Excess Inventory Of Vacant Apartments via Multifamily Insiders Blogs

This report is courtesy of the National Multi Housing Council.

In the aftermath of the Great Recession, absorptions dried up, causing the number of vacant apartments to rise beyond the normal range and creating what are termed “excess” vacant units. This excess inventory signaled a supply-demand imbalance that led to a sharp cutback in new production and lower returns. Over the past three years, however, the increase in apartment demand has outstripped the increase in supply, causing occupancy rates to trend up again and reducing excess apartment inventory. But to what extent has that excess inventory of vacant apartments shrunk?

Unfortunately, public data are too limited to provide a clear and simple answer. What follows is a brief summary of data sources and issues, along with a standard estimate of excess apartment vacancies. Following that is an assessment of the reliability of this sort of estimate. Our best estimate is that there is little excess vacancy nationally. This means that while there is excess vacancy in some metro areas, it is offset by other markets where the number of vacant apartments is below average.

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