What is a Vacancy Rate?

Published by Thomas Herold in Economics, Investments, Real Estate

'Vacancy Rate' is explained in detail and with examples in the Investments edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.

Vacancy rates turn out to be statistics that are gathered and maintained on availability of homes for sale, rental properties, and hotels. When you see high rates of vacancy, this is evidence that a market is struggling. Lower vacancy rates are hoped for as they demonstrate that properties are in demand and vacancies do not stay open for much time. Government agencies and other companies that focus on economic analysis maintain the records on vacancy rates. If you are contemplating moving into a new community, then you will find that vacancy rates are worth contemplating.

Where housing is concerned, vacancy rates add up all housing units that can be lived in but are not presently occupied. The agencies compiling the vacancy rates then express this as the percent of available to be lived in housing that is presently vacant. Vacancy rates cover houses, townhouses, apartments, and other forms of housing. As vacancy rates prove to be lower, it becomes more difficult for individuals to obtain housing. This is because the types of housing that they want may not be available either for sale or rent on a regular basis.

The vacancy rate statistics can be found on various kinds of housing arrangements. This differentiates on vacancy rates between townhouses, apartments, and single family homes. Landlords read these vacancy rates to be appraised of the rental situation, since changes in this number impact how much rent they can charge tenants. If landlords’ tenants are constantly leaving, causing high rates of turnover, then they may wrestle with high vacancy rates personally.

When you see high vacancy rates in housing, it indicates that economic recession or depression is evident. High rates of vacancy can also happen if a great number of individuals leave a particular community, causing significant quantities of homes to lie vacant. Developers incorrectly estimating how strong a market is for housing in a local community might also cause them. Another factor that leads to higher vacancy rates proves to be rents that are high. When individuals can not pay an area’s rent, then they will look for other places to live. Hotel vacancy rates demonstrate the strength or weakness of an area economy more profoundly, since high hotel vacancies mean tourism in the area is down.

Businesses are concerned with commercial vacancy rates. These are commonly figured up separate from residential vacancies. In the business vacancy rates figure are commercial buildings like factories and warehouses, and also empty retail storefronts and offices. Lower rates mean that people are supporting the businesses by spending their dollars in those areas. When consumers see a large number of empty storefronts, even when the economy is doing well, it will discourage them from frequenting that plaza or area.

Any individual who wants to see the vacancy rates for a given community can get them. A good place to start looking is at a local government office and in census data. Besides this, Realtors commonly maintain statistics on area vacancy rates, as do Internet sites that keep demographic information on different communities.

Free Download (No Signup Required) - The 100 Most Important Financial Terms You Should Know!
This practical financial dictionary helps you understand and comprehend the 100 most important financial terms.

The term 'Vacancy Rate' is included in the Investments edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.