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It's My Party, And I'll Cry If I Want To. You Would Cry Too If It Happened To You.
Rents are down and vacancies are up. So forget the H1N1 virus. Right now a lot of investors and property managers are suffering from an affliction that seems to come around only once every ten years or so. It's called Lesley-Gore-itis and it tends to make investors cry.
Here are some of the findings of our fall survey of 20-unit and larger apartments in the Puget Sound region, published in the October Apartment Vacancy Report. We collected information on 197,095 units in 1,910 properties. That represents 85.8% of the rental market in King, Pierce, Snohomish, Kitsap, and Thurston counties.
The Puget Sound region's apartment market vacancy rate is 7.2%, up from 6.6% last spring. The increase is mostly due to a significant jump in Pierce County. But it remains a struggle elsewhere too. It would have climbed more if property managers had not lowered rents as much as they did over the past six months.
The "market" vacancy rate excludes vacancies in new construction still in lease-up and properties undergoing significant renovation. The "gross" vacancy rate counts all vacant units. It is 8.4% for the region now, up from 7.5% in March. The gross rate climbed in every submarket except the Eastside and Kitsap County.
In April we forecast the gross vacancy rate would reach 8.7% by September, peak at 9.7% by June 2010, then start to fall. The more aggressive rent reductions recently may moderate our next vacancy forecast a little bit. Vacancies are climbing due to job losses reducing apartment demand at the same time supply is increasing.
The average rent in the region...
