Apartment owners are going through one of the worst business years in the last two decades. The vacancy rate in US has reached to 7.8 percent and is at the highest level in 23 years.

Vacancy rate is continuously on rise after the recession. According to a recent report published by Reis Inc., a New York real-estate research firm that tracks vacancies and rents in the top 79 U.S. markets, the US apartment vacancy rate rose to 7.8 percent in the third quarter and is highest since 1986.

The primary factor behind this increase in the vacancy rate is job loss. People who have already lost their jobs or have fear of losing their job are very cautious for rentals and considering different options to minimize their spendthrift on property. Landlords are now offering less rent for their properties still the occupancy rate is not increasing.

The vacancy rate is expected to increase further in the coming months and can cross the 8 percent mark by perhaps next quarter. Victor Calanog, Reis director of research says, “It makes me wonder whether the avalanche is on its way for office and retail (real estate) unless things change really quickly and really drastically. Vacancy could be worse if landlords didn’t realize fairly early on that this end game was not going to end well and lowered rents really quickly”

The problem is further compounded with the increase in the number of new buildings and the number can reach up to 100, 000 units. With the sharp decline in the financial sector and job loss property rent can further go down and vacancy rate will not show any improvement in the coming months.

written by REI Circle (www.reicircle.com)