Although the multifamily sector leads the commercial real estate market in terms of performance, the ""National Association of Realtors"":http://www.realtor.org/ (NAR) expects the apartment rental market to see its vacancy rate tick up over the next year.[IMAGE]
The NAR projects the multifamily vacancy rate will rise from 3.9 percent in the second quarter to 4.1 percent during the same quarter in 2014. Though, according to the NAR, a vacancy rate of less than 5 percent makes the sector a landlord's market, where demand justifies increases.
In some metro areas, the multifamily vacancy rate is well-below the national average. The lowest rates were found in New Haven, Connecticut (2 percent) and New York City (2.2 percent), as well as in Minneapolis and San Diego, where the rate is 2.3 percent for each metro.[COLUMN_BREAK]
The association also forecasts strong increases in rent prices, which are projected to go up by 4.6 percent this year and 4.6 percent in 2014.
At the same time, the NAR says industrial vacancy rates should slip to 8.9 percent from 9.4 percent over the next year.
The NAR reported Orange County holds the lowest industrial vacancy rate of 3.9 percent, followed by Los Angeles (4.1 percent), Miami (5.8 percent), and Seattle (6.3 percent). Rents are also expected to increase for the industrial sector and rise 2.4 percent this year and 2.6 percent in the next year.
Retail vacancy rates are forecast to fall to 10.2 percent in the second quarter of 2014 from 10.5 percent the year before.
Areas in California also had the lowest retail vacancy rates such as San Francisco (3.6 percent) and Orange County (5.3 percent). Fairfield County, Connecticut also had a low rate of 4.1 percent.
Rents in the retail sector should inch up by 1.4 percent in 2013 and 2.2 percent next year.
The office sector, which has the highest vacancy rates, will edge down to 15.6 percent from 15.7 percent during the same time period, according to NAR's projections.
Areas where vacancy rates are the lowest range from markets such as Washington, D.C. (9.4 percent) to New York City (9.9 percent), and Little Rock, Arkansas (12 percent) and Birmingham, Alabama (12.3 percent).
The NAR expects the office sector to increase rents by 2.6 percent this year and 2.8 percent in 2014.