Packing up! Rental properties set for record vacancies

July 24, 2009 10:32:00 AM

Kristin Mamrack -

 

The apartment vacancy rate in 2009 will reach record high levels, with job losses leading to a decline in the number of renters, say various commercial real estate reports. 

 


Some local property managers have noticed a high number of vacancies in Columbus rental properties and noted favorable terms for home buyers boosting the housing market. 

 


"If you look in the classifieds, you''ll see a lot of apartments for rent," noted Bobby Caldwell of Caldwell Properties, which reported no vacancies in rental property. "I''ve been concerned about that. There apparently are a lot more apartments for rent than there were six months ago. I don''t know where people are going. Maybe, they''re living with mom and dad." 

 


But several property managers note the rental market is holding steady, even improving in some cases, as uncertain economic times drive would-be buyers into renting. 

 


"It''s kind of holding steady, especially with housing being down," said Teena Dodd, a property manager with Riverhill Property Management. "Ours has been holding real steady and probably, this past month, we''ve really had the phone ringing." 

 


"Oh yeah, buying is just practically nothing now," said Tommy Tate of Swoope Real Estate. "The rental business is picking up. We, fortunately, haven''t had many foreclosures in this area and our economy here is helped with the new industry coming in and Starkville''s too. But the ''for sales,'' there''s just not much moving now at all. If people don''t have the money for it, they can'' t borrow money now. That''s what got us into this mess to start with." 

 


"We have more people who are interested (in renting)," said Mac McCarty of McCarty Real Estate. "Right now, they''re wanting to rent instead of buying. It''s (economic) uncertainty. They''d like to buy, but they don''t know if the economy is going to pick up or go south." 

 


"I really can''t say we can tell any difference (in the number of prospective renters)," said Marie White of Vice Investment Properties. "Occasionally, we get someone who says they''re selling their house and they''re going to rent for a while." 

 


"A lot of people are buying houses right now, with interest rates so low and incentives to buy," said Heather Barnett of Colony Apartments. "We''ve got people that are looking to buy houses. (But) the rental industry is still strong. I would think the housing industry is picking up, as well." 

 


The 2009 National Apartment Report, issued by commercial real estate services firm Marcus & Millichap, notes the U.S. home ownership rate, which rose to more than 69 percent in late 2004, has dropped since 2005 by 2.6 million households "most of whom are likely renters." 

 


Additionally, the report noted the national apartment vacancy rate is forecast to increase to 7.7 percent due to job losses and competition "from shadow rentals." 

 


Founded in 1971, Marcus & Millichap''s research division produces more than 200 reports annually. 

 


A special June 2009 report issued by Marcus & Millichap noted national apartment demand weakening and "extreme job losses and rapidly rising unemployment are hampering household formation, forcing many renters to double up or even move back with family." 

 


"In addition, deeply discounted home prices due to foreclosure sales and (a first-time homebuyer tax credit) are encouraging some current renters to purchase houses," the report stated.