Multifamily properties continue to lead the way for the commercial real estate sector recovery.
Property data indicates that the multifamily vacancy rate was just 4.7 percent during the second quarter, according to a report from Reis. This development indicated a decline of 20 basis points from the previous three-month period. In addition, this was the first time the multifamily vacancy rate fell below 5 percent since 2001 and only the third time in the company's 30-year history of collecting this information.
Meanwhile, the decline in vacancies was believed to have pushed average rental rates higher across the country. After the housing market collapse, many Americans were forced to put their dreams of owning property on hold, and opted to continue renting while their financial situations improved.
To compensate for this demand, more real estate developers are expected to break ground on new multifamily buildings, as an estimated 70,000 projects are scheduled for completion by the end of this year. While this may seem like a high number, between 150,000 and 200,000 new multifamily homes are expected to be completed in 2013.