The first quarter of this year brought signs of a strengthening economy. With improving employment conditions, household formation is expected to grow. Coupled with lingering issues in the housing market, these factors are boosting the performance of the apartment sector.
Demand for apartments, as measured by net absorption, posted a good year in 2011. The trend continues into the first quarter of 2012, with net absorption at a positive 36,484 units, according to REIS. Vacancy rates declined to 4.9 percent for the quarter. In addition, rent growth continued on an upward trajectory, with effective rents rising 0.9 percent during the first quarter, the fastest rate of growth since 2008. Nationally, effective rents were at $1,018 per month.