In property management, one of the most important stats to track is vacancy rate. Vacancy rate, simply put, is the percentage of all units that are unoccupied at any given time. This exact percentage is in flux throughout the year as tenants come and go, but on average, it can give you a good idea of how the market is performing. The higher the vacancy rate, the worse the market; rents will typically be lower due to less demand and more available supply. The lower the rate, the better the market; units are easier to occupy and keep occupied. We like to keep track of vacancy rates for Birmingham to gauge the market so we can offer sound insight to our clients. One good source for this data is the U.S. Census Bureau, which tracks vacancy rates across the country. Vacancy Rates in Birmingham through Q3 2014 The Census Bureau has data for the year ending in the third quarter of 2014, which is the end of September. According to the data, Birmingham’s vacancy rate was 9.8 percent at the end of the first quarter, but swelled to 13.2 percent by the end of the second quarter. Fortunately, the market recovered a bit; by the end of the third quarter, the rate was back down to 11.6 percent, which is still higher than what we’ve seen this year so far but still lower than where we ended 2013 (13.8 percent). The state’s average vacancy rate, by comparison, was 16.1 percent at the end of the first quarter and 11.6 percent at the end of the second quarter. Vacancy Rates from 2009 to 2014 Looking back, we can identify a trend by examining the highest and lowest vacancy rates from 2009 to now:
The highest average was 14.6 percent in 2009; the lowest was 8.5, in 2010. The recession had a dampening effect on vacancy rate, which fell sharply in 2010 only to pick back up the next year. Since then, it has declined consistently until this year (which is still without fourth quarter data). On average, the Birmingham market has beaten the state’s average vacancy rate each year, suggesting that Birmingham is a stronger rental market than other areas throughout the state, and comparable to other metro areas in the South.
Matthew is the CEO of Evernest. He is a student of the book Good to Great and is passionate about building the best property management company on the planet (and maybe even the universe if Elon Musk will hurry up). You can usually find Matthew at the baseball field with his son, at a dance recital with his daughter, or at his favorite restaurant with his wife, when he’s not in the office. And if you can’t find him in any of those places, it probably means he’s traveling.