MULTIFAMILY EXECUTIVE MAGAZINE reported in January that the percentage of people
moving out of apartments to buy houses had fallen to an al-time low. This is good
news for owners of rental housing since it will support lower vacancies in rental
units. Rental housing continues to do well in most markets in the U.S.
GOOD NEWS FOR RENTAL HOUSING: REITs see record lows in flight to home ownership.
Source: MULTIFAMILY EXECUTIVE MAGAZINE – January 1, 2009 – By Les Shaver
Multifamily Reits had some good news in the third quarter of 2008: more renters than
ever are staying in their units.
Camden Property Trust, a Houston-based REIT, saw its move-outs for home purchases
fall to an all-time low of 13.6 percent, after peaking in 2004 at 24 percent. UDR,
a Highlands Ranch, Colo.-based REIT, saw its move-outs drop from 15.5 percent in
the same period last year to 13.1 percent this year.
“Homeownership is at historical lows,” says Christopher Wimmer, a vice president
and senior analyst for New York-based Moody’s Investors Service. “People are
worried about the economy and their jobs, and they don’t see [buying a home] as a
good idea at this point.”
AvalonBay Communities, a REIT based in Alexandria, Va., saw fewer than 20 percent
of its residents move out to buy homes. That’s low for the luxury operator.
Meanwhile, Home Properties, a REIT based in Rochester, N.Y., that has lower-priced
apartments, saw only 12.4 percent of its renters leave to buy homes. “These are the
lowest numbers we’ve seen in three years,” says Charis W. Warshof, Home’s vice
president of investor relations.
As layoffs pile up, most people guess that keeping renters disinclined to buy will
not off set increasing unemployment. “We do expect 2009 to be a challenging year,”
says David J. Neither-cut, president and CEO of Chicago-based Equity Residential,
which saw its move-out rates fall to 5 percent.
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