http://www.biggerpockets.com/renewsblog/2009/11/02/apartment-vacancy-rate-hits-highest-point-25-years/

Posted: 02 Nov 2009 06:18 PM PST

In what is an interesting phenomenon, apartment vacancies have hit their highest point since 1986 in cities across the country.
According to Reis Inc., a New York real-estate research firm that tracks vacancies and rents in the top 79 U.S. markets, the vacancy rate reached 7.8% this summer, which is normally a strong period for rentals. And, the rate is expected to rise even higher in the fall and winter, when rental demand is weaker, pushing vacancies to the highest levels since Reis started keeping records in 1980.
So, what is causing the increase in vacancies?
One word: unemployment, which is close to 10%–a 26 year high. It seems that the high jobless rate is leading would-be renters to double-up or move in with family or friends. This has really put the squeeze on landlords because unemployment has been higher among workers under 35 years old, who are more likely to rent. As a result, rents across the country have fallen by 2.7%.
The second and third quarters typically are the strongest periods for landlords because they are popular times for people to move. But this year, according to Victor Calanog, director of research for Reis, “vacancies just continued rising.” The third quarter saw vacancies increase in 42 markets, improve in 26 markets and remain unchanged in 11 markets. Omaha, Neb., saw the largest rise in vacancies, with the rate rising 1.1 percentage points to 7.4%. Other significant increases were seen in Memphis, Tennessee; Indianapolis, Indiana; Raleigh, North Carolina; and Tacoma, Washington.

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