Monday, March 9, 2009

Recession impacts apartment complexes

In the past year, most major apartment complexes in Lancaster County have experienced a moderate rise in vacancies.

To attract prospective tenants, some especially hard hit local apartment complexes are offering several weeks of free rent and have minimized security deposits. One is providing up to $500 in free prizes at an upcoming open house.

Other complexes have reduced the amount of annual rental increases or eliminated them altogether.

Typically, when the housing market slumps, the rental market jumps; but this widespread recession—with its under-valued real estate, scarcity of jobs, and stifling effect upon consumer buying habits—has not left American apartment complexes unscathed.

Between September and December, national occupancy rates dropped 0.7%, not much in comparison with the rise of unsold home, but yet significant.

Some apartment renters are moving out to take advantage of lower house prices. On the other hand, “empty nesters” who would like to move into an apartment are unwilling to sell their homes at today’s prices.

One apartment owner opined that a certain amount of “doubling up” is taking place, thus shrinking both the house and apartment markets.