Buoyed by the relative strength of the class B and C markets, overall multifamily rental vacancies rose from 4 % at the beginning of 2001 to 5.2% to start this year, according to Marcus & Millichap. An additional increase in the vacancy rate to 5.8% is predicted before year's end.
"Owners of luxury multi-family complexes took the brunt of the recessionary blow to the local market, while class B and C demand remained relatively healthy," says senior vice president and regional manager Greg A. Moyer.
Class B and C units are becoming attractive to former renters at class A buildings looking to cut housing expenses, the report notes.
While it may be tougher to rent out units now, Moyer suggests it is a good time for owners of luxury apartment buildings to sell. Marcus & Millichap's report predicts sales prices will rise faster than rents, which are predicted to increase by 3% to 4% this year after a 5.6% increase in 2001. The lack of available properties has resulted in buyers bidding up the prices of those on the market, especially luxury buildings near the Central Business District, where available land is scarce.
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