Apartment Vacancies Hit 10-Year Low
Nationally there's a boom for apartments and Milwaukee is helping to lead the way.
Why does your rent keep rising? It’s all about supply and demand. Few apartments are available as the rental vacancy rate in Milwaukee is the lowest its been in a decade.
Milwaukee’s apartment vacancy rate is more than a percentage point below the national average according to the United States Census Bureau. In the fourth quarter of 2015, the Milwaukee metro area recorded a rental vacancy rate of 5.6 percent, while the national average hovered at 7 percent.
As the graph here shows, the rental vacancy rate can jump back and forth but has mostly declined over the last decade, except for a spike upward to 17 percent in the fourth quarter of 2012. The vacancy rate plunged to as low as 2.8 percent — the seventh lowest rental vacancy rate in the nation — in the third quarter of 2015. The region averaged a vacancy rate of 4.55 percent for all of 2015, exactly matching its performance from 2014; both figures are the lowest in at least 10 years.
Milwaukee, in line with the rest of the nation, has seen a steady decline in the apartment vacancy rate since 2005. This comes at the same time thousands of apartments have recently opened in Milwaukee and the rest of the region. Yet, as we’ve reported, thousands more apartments are still coming to the market and the Census Bureau figures suggest the still booming demand will absorb the new units quickly. This is in line with individual buildings we’ve profiled, including The North End, which is 96 percent occupied and the Brix Apartment Lofts which is 100 percent full.
Where are all these renters coming from? Certainly the Great Recession and the foreclosure crisis that came with it was a big factor, but the changing demographics and preferences caused by a wave of Millenials coming of age is also a contributing factor.
Also at play in Milwaukee is a low rate of homeownership relative to the rest of the country. Renters are nearly as prevalent as home owners in the region, with 45.6 percent of residences being rented, versus 55.4 percent being owned. According to survey data for the fourth quarter of 2015, the only metro areas with a lower rate of homeownership than Milwaukee are Las Vegas, New York City, San Diego, Los Angeles and San Jose.
About the Data
The rate is compiled as a single figure for the four-county, Milwaukee metropolitan statistical area, which includes Milwaukee, Waukesha, Washington and Ozaukee counties. The population for this region according to a July 1, 2014 release from the Census Bureau is 1,572,245, a 1.05 percent increase from the 2010 census reported amount of 1,555,908.
For those that love a good spread sheet, the Census Bureau makes all of the data publicly available.