Multifamily Occupancy Gains Grind to a Halt via National Real Estate Investor

In our last column on the multifamily sector, we noted that improvements in the apartment sector slowed a bit in the first quarter. Preliminary second quarter data from Reis indicates a decline in the rate of net absorption and a stalling of declines in vacancy. While this seems to show a continuation of this trend into the second quarter, the reality is more of a mixed bag.

Vacancy was unchanged during the first quarter at 4.3 percent. This marks the first time that the quarterly vacancy rate has not fallen since the first quarter of 2010. Over the last four quarters national vacancies have declined by 50 basis points, a bit slower than last quarter's year-over-year decline in vacancy of 70 basis points. However, this dynamic is somewhat to be expected and not necessarily indicative of a slowing market. As the market gets tighter and tighter, it becomes increasingly difficult for vacancy to continue falling at a high rate as vacant units, or at least palatable vacant units, disappear from the market.

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