If you own an apartment building, vacancy is a bad thing, right? Heck yeah, it’s a bad thing and, if it goes on for too long at too high a rate, you might find yourself part of the long, lonely line of foreclosures. But don’t get your nose bent out of joint just yet. Last year, the Wall Street Journal proclaimed “Apartment Vacancies Hit a 22 Year High!” Obviously, it’s a sensational headline meant to sell papers on the newsstand and if a few thousand landlords inadvertently crap themselves at first glance, sorry, that’s the way the cookie crumbles.
But, as they say, the devil is in the details. For those who choose to forge ahead into the body of the article, the revelation of a few facts make life worth living again. Reading, reading, reading. When we reach paragraph three, we find that 45 of the 79 markets tracked showed an increase in apartment vacancies which, if our math is correct – and sometimes it is – 34 markets exhibited either stability or a decrease in apartment vacancies. That’s a full 43%, a not insubstantial number.
What happened is that the Wall Street Journal reporter fell for one of the oldest tricks in the real estate industry book – the myth of a “national real estate” market. You can no more make a claim about the nation as a whole when it comes to real estate than you can say the moon is made of green cheese and you took a bite. Regular readers may get tired of our harping but each market rises, falls or stands on its own merits. Apartment vacancies in Los Angeles have nothing to do with apartment vacancies in New Orleans, other than the fact they’re both buildings. After that, no similarities whatsoever and to make a sweeping generalization that lumps different cities under one broad stroke is either disingenuous or idiotic. Which is it in this case? Your call.
The bottom line is that a full 43% of the markets tracked showed stable or increased business in the face of the worst economic downturn since the Great Depression. We’ll take that and be happy.
The Commercial Investing Center Team
Flickr / gruntzooki