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US Housing Market
The multi-housing vacancy rate in the US is expected to rise in 2013, according to new analysis from the CBRE Group, Inc. Over the year a rise to 5.3 per cent is expected, up from 4.5 per cent recorded in the penultimate quarter of 2012. The CBRE claim this will be driven by new construction completion and a slight drop in demand from the high levels experienced over recent years. The situation is expected to change only somewhat going into 2014, with a vacancy rate of 5.2 per cent in 2014. At the end of the year, multi-house vacancies have a five per cent projection. This is down from 5.4 per cent in 2011 and 7.3 per cent enjoyed during the 2009 peak. However, rents have now surpassed previous peaks in most markets and the vacancy rate is below the historical average. "It is a great time to own multi-housing properties," Gleb Nechayev, senior management economist, CBRE econometric advisor, stated. "Apartment demand is benefiting from the slowly recovering economy as well as rapidly expanding pool of renter households." The upswing for the market began in late 2011, with expansion beginning steadily. Since last year, the fundamentals have continued to improve, making multi-housing an attractive investment opportunity for buyers. This is compounded by a surge in new supply and completions are on track to return to the 1998-2008 annual average of approximately 190,000 in 2013. According to the CBRE, there will also be growth in demand, causing the vacancy rate to move slowly back up to its normal 5.3 per cent average. This will be driven by regions with heavy concentrations of high-tech employment, such as San Francisco, Denver, Austin and Atlanta. Total employment has already surpassed pre-recession peaks in the region, as the US continues its recovery. Investors are increasingly turning their attentions to the country, following reports of market growth. The CBRE maintains that their will even be positive news to report in some of the environments hardest hit by the housing bust, such as Phoenix and Orlando. Analysts predict that these markets will lead the nation in rent growth.
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