Tucy wrote:Both RealPage's and CBRE's numbers show that we are building apartments faster than they are being rented, hence the concessions that were also mentioned in Steve's article, and the rising vacancy rates.
You are incorrect.
Occupancy strengthened between quarters, going from less than 95% at end of 1Q17 to almost 96% at end of 2Q17. The increase in the occupancy rate is in the face of thousands of new apartments entering the market.
Let's use an example that even an elementary math student could understand:
For sake of discussion let's say at end of 1Q17 there were 100,000 total apartments in Dallas at 94.9% occupancy. That equates to 94,900 occupied units with 5,100 vacant units. Simple math.
Let's say at end of 2Q17 there were 10,000 new apartments delivered during the quarter, now making 110,000 total apartments in Dallas at a 95.9% occupancy rate. That equates to 105,490 occupied units with 4,510 vacant units. Again simple math.
You do understand that with an increase in occupancy rate between end of 1Q17 to end of 2Q17 that means greater numbers of units are occupied than vacant, in spite of thousands of new apartments being added to the inventory.
Even in a static growth environment, an increase in occupancy rate reduces vacancies.
Vacancy has NOT increased between 1Q17 and 2Q17 ... it has DECREASED because the occupancy rate INCREASED. They are the exact inverse of each other!
In the simplistic example above 4,510 vacant units at the end of 2Q17 is LESS than the 5,100 vacant units at the end of 1Q17 ... even in the face of 10,000 new apartments being delivered in the second quarter.
Bottom line is that in 2Q17 Dallas is absorbing apartments faster than they are being delivered. End of discussion.
That may not be true in 3Q17, and may not have been true in previous quarters, but for the present time, right here and right now at end of 2Q17, IT IS TRUE.