According to a recent report by Reis , demand for rental units slowed slightly in the third quarter due to a large amount of new units available on the market.
The data shows that now, just before thousands of new rental units are preparing to enter the market, the apartment boom appears to be slowing. Apartment vacancy rates fell just 10 basis points in the third quarte to 4.6 percent. This is the slowest improvement since the rental market recovery started in 2010, Reis reports.
In an interview with CNBC, Victor Calanog, a Reis economist, noted that demand for new units is still larger than supply growth, and the apartment market still boasts enviable vacancy and rental rates. However, analysts are concerned that the coming influx of new units will come online just as consumers are looking for housing elsewhere. Thousands of units were approved for construction during the housing boom, but many may come on too late to enjoy the current demand.
Reis reports that 200,000 new units will become available in 2013, and approximately 320,000 in 2014. Between 2001 and 2008, the firm notes that the average amount of new units per year was 120,000. If demand continues to slow, rental property managers may be faced with higher vacancy rates, fewer rental applications to choose from and decreased rent.