Well, the peak season is behind us. Once again, it was a very interesting year. While we saw an initial uptick in the number of prospective tenants and increase in some rents early, the end of the season was mixed.
The early season saw some rents increasing early. However, after about mid-July we saw the vacancies staying high and rents beginning to come back to 2004 levels--some market segments even saw some further decreases in rents.
In looking at the chart above we saw lower vacancy rates down from the last two years. We also saw a large spike in vacancies in late August and early September. We attribute this to a large number of student properties that normally do not directly affect the rest of the residential market. As of today the vacancy rate is back to a level similar to October 2004. This is still an improvement from the levels in 2003.
There are a number of factors that will continue to affect the rental market in the area. As with any sector, there are both positive and negative factors. These include:
Positive factors:
Negative factors:
Unknown:
The changes in the bankruptcy laws, and the resulting huge increase in filings, may affect the rental market. It will probably be some time before we fully understand how significant this will be. We are hoping this will end up reducing the number of rental properties overall and thus improve the market over time. We will have to just wait this one out.
