Apartment Market Rallies in Third Quarter

New York, NY, Nov. 4, 2010 -- Almost every multifamily market saw strong leasing, rising demand and falling vacancies in the third quarter as the nation’s apartment market continued a solid 2010 rally, according to commercial real estate information firm CoStar Group.

The company says that apartments should continue to surge over the next five years, with a growing supply of renters and very little new product in the planning pipeline. 

"Of all the property types, people are feeling the apartment market has clearly turned a corner," said CoStar Global Strategist Michael Cohen.

"Improvements in the U.S. economy overall will favor the apartment market." 

CoStar said the national vacancy rate compiled from the 54 largest markets tracked by CoStar declined for the third straight quarter in 2010, falling 20 basis points to 7.7%. The national rate was a record 8.4% at the end of 2009, rising 130 basis points over the course of last year.

A number of factors are likely contributing to this reversal of fortune in apartments, CoStar said, including the fact that there is almost no new supply. 

By the end of 2010, CoStar expects that apartment developers will have delivered about 54,000 new units -- slightly less than half of 2009 levels.