With many Americans boomeranging back to mom and dad's or having roommates, apartment landlords and their lenders continue to bite their nails as they await recovery.
The Pew Research Center reported Tuesday that one in 10 adults ages 18 to 35, prime renting years, said the weak economy has forced them to return to the nest. Reasons range from job loss to pursuing an education.
The report quantified longstanding concerns and weighed on the stocks of multifamily real estate investment trusts. By early afternoon, Apartment Investment and Management Co. was off 5.1%, at $12.91; Colonial Properties Trust was down 2.6%, to $11.01; the upscale operator Post Properties Inc. was off 4%, at $18.04; and the sector bellwether Equity Residential had dipped 1.5%, to $31.59.
For apartment operators, it does not matter why older children are returning home. It just matters that they are. That means more empty apartments — the vacancy rate is at its highest level in 23 years — with price cuts needed to fill them. Frantic landlords are offering incentives ranging from rent reductions to flat-screen televisions to attract tenants. New tenants might not even have to pay security or pet deposits. More landlords are overlooking foreclosures on credit reports, once a possible deal breaker.
