This morning's San Diego Union Tribune reports that our San Diego County apartment vacancy rate is the highest it has been since 1995.
Are we surprised?
The reasons cited for this increased vacancy rate include:
1. Face-lifted condo conversions (that have no chance of selling in this market) are being returned to the rental market. The tenants who had been kicked out earlier moved on and found new homes. These projects are now starting from Ground Zero in finging new tenants.
2. Unsuccessful flippers have no choice but to put their properties on the market as rentals--and this creates direct competition for apartment complexes.
3. New projects have also entered the market, further increasing rental availabilities. In this writer's opinion, many of these projects were built in anticipation of existing apartment properties leaving the market as sold condo conversions, thereby lessening rental competition.
Life and business surprise.
But newspapers, of course, love to report the bad news.
It turns out that San Diego's vacancy rate is hovering at 4.5 percent. That is not an unreasonable figure under any circumstances. Moreover, throughout San Diego County, average apartment rents register at $1261.00--up $50.00 from a year ago.
The conclusions that might be drawn from these figures are interesting ones:
1) If I were a predatory buyer, I would be looking to negotiate with failed flippers and their lenders.
2) If I were looking to rent, I would present myself as a negotiator.
3) If I were writing blogs about real estate doomsday, I would take the time to read articles carefully and look for meaningful statistics.
The situation is interesting, but far from real estate Armegeddon.
Other Blog: http://www.LuxuryHomeDigest.com