The average rent for a residential apartment fell in the fourth quarter of 2008. Although the average decline was small – only 0.4 percent – the drop was significant because this was the first time rents have fallen overall since 2003. The average vacancy rate was 6.6 percent, up from 5.7 percent a year earlier, according to research firm Reis Inc. The average office rent fell 1.2 percent in the fourth quarter. This marks the end of a surge in office rents that saw the average increase by 10.6 percent in 2007.
Out of 79 markets surveyed, only 10 saw average office rents increase in the fourth quarter, and only one – Pittsburgh – saw an increase of more than 1 percent. (Pittsburgh rents were up 2.5 percent.) A number of markets saw office rents decline more than 2 percent; of these, the worst hit were Orange County and Oakland, Calif.; Richmond, Va.; Ft. Worth, Texas; and Chattanooga, Tenn.
The average office vacancy rate was 14.4 percent, up from 12.6 percent a year ago. Six major markets had vacancy rates above 20 percent: Detroit; Dallas; Dayton, Ohio; Winston-Salem, N.C.; San Bernardino, Calif.; and Hartford, Conn. Only New York City and Washington, D.C. had vacancy rates below 10 percent.