Vacancy Rate
Candlefocus EditorThe vacancy rate is expressed as a percentage and is calculated by dividing the total number of vacant homes or rental units by the total number of available housing units. A higher vacancy rate means there are more properties available on the market, while a lower rate indicates that there is less available housing relative to the number of people in need of it.
Vacancy rates provide insight into the current state of the market, from a renter or buyer's perspective. If an area has a low vacancy rate, it may suggest that there is a shortage of available properties. That could lead to rents and prices being higher than average. Alternatively, a high vacancy rate could indicate that there is a surplus of vacant properties which could drive prices down.
Data on vacancy rates is important for real estate industry professionals such as investors, developers, and landlords. They use it to ensure they are making sound financial decisions and to help them make adjustments based on the current market conditions. It also keeps them up-to-date on the dynamics of the area, including demand and pricing.
Moreover, the vacancy rate data can be used to inform local government decisions. For example, if the vacancy rate signals an issue related to housing affordability, then local governments can work to implement policies or programs to address it.
It's important to note that vacancy rates tend to fluctuate depending on the season. Summer tends to be the busiest period for rentals, while winter is usually a slower period. Locations that experience seasonal fluctuations usually have a higher vacancy rate in the off-season compared to peak-season.
Overall, vacancy rate is an important metric for understanding the state of play in a local real estate market. It is useable by industry professionals to make informed decisions, and is also useful for local governments in shaping policy and programs.