Vacancy Rates

The rental vacancy rate graph shows a significant trend down. The rental vacancy rate into 2011 is sharply declining. The lower the vacancy rate, monthly rents will trend higher. In my previous posts, I indicated that multifamily housing projects have also suffered during the great recession. Also, municipalities are reluctant to approve zoning requests increasing density. Most of the rental units are being absorbed by displaced homeowners that have lost their home to foreclosure or a short sale. Their credit rating must be repaired before entering the housing market again – if ever.

When rental vacancy rates are back to “normal” ranges, the choice will become clearer for home ownership, especially as the gap in family formations is reduced. All of this highlights a pending surge in demand even beyond the current pent-up demand. Demand will increase housing prices and the cycle will begin in reverse from what we have experienced over the past 3-years.

Time to buy a home, townhouse or condominium is now.