Reis in the News
By Victor Calanog & Barbara Byrne Denham
Source: Scotsman Guide – Tax changes spur growth across the apartment market
Reis’ 2018 year-end apartment statistics show a higher national vacancy rate of 4.9 percent, up from 4.6 percent at the end of 2017. The increase was due to another year of inventory growth (2.2 percent) that was only partially offset by occupancy growth of 2 percent.
This higher vacancy rate, however, obscures the fact that occupancy growth was still higher in 2018 than in 2017. A total of 204,900 units were absorbed in 2018, well above the 187,600 units absorbed in 2017, but still below the 216,100 units absorbed in 2016.
Indeed, while tenant occupancy decelerated in 2017, it rose again in 2018 due in part to rising mortgage rates as well as the Tax Cuts and Jobs Act signed at the end of 2017. The new tax law not only lowered the state and local tax-deductibility ceilings, it also doubled the standard deduction, which reduced the incentive to take the mortgage interest deduction. This, in turn, lowered the incentive to buy a home for many prospective buyers.