USA apartment flat vacancy rate at 4.2 percent in year end

USA apartment flat vacancy rate at 4.2 percent in year end, while rents continued to rise due to a increase economy and labor market, said real estate research firm.

Real estate research firm said it expect the vacancy rate to slowly float up this year due to a significant level of predictable construction. Rents will continue to rise in running year (2015) but at a slower pace stymied by the sheer number of new units that are going to come online.

The national vacancy rate was 4.2 % during the year end, unchanged from the 3rd quarter. The vacancy rate had risen slightly by ten basis points in the 3rd quarter, which was the first time increase in roughly five years. Rents reached record-high nominal levels during the year end, but grew at a slower pace than in the 3rd quarter. 

Asking and effective rents rose 0.6 % during the year end. Asking rent had risen 1.1 % in the 3rd quarter, while effective rents - what the renter actually pays on a yearly basis after discounts - rose 1.2 %. 

New York remained the most luxurious market in the country with effective rents registering $3,223 per month, a 44% premium to San Francisco, which remained the second-most expensive market. 

However, New York was among the cities with the highest % gains in the vacancy rate due to a quicker increase in supply than demand, the report said. 

New York vacancy rate increased by 60 basis points to 3.3 % in the year end. Reis also noted a strong rise in vacancy rate in markets such as Charleston, Austin, Wichita, and Birmingham.

San Jose remained the tightest market in the US in the year end with a vacancy rate of 2.4 %, a decline of 10 basis points from the third quarter, buoyed by strong demand due to the thriving technology industry and comparatively limited new construction, the report said.