In this article, we will look at 20 US cities with the highest rental vacancy rates. If you want to skip our detailed analysis of the real estate industry, you can go to the 5 US Cities with the Highest Rental Vacancy Rates.
Residential Real Estate Market and Its Latest Trends
According to a report published by Mordor Intelligence, the residential real estate market was valued at $10.50 trillion in 2023. The real estate industry is expected to progress further and grow at a compound annual growth rate (CAGR) of 6.07% from 2024 to 2028, reaching $14.10 trillion by the end of the forecasted period. The residential real estate market withstood the disruption and adverse effects of COVID-19 and the market has since then steadfastly recovered. In the US inflation affected the real estate industry significantly. However, for middle-aged and senior citizens, the homeownership sector continued to flourish with higher demand for condominiums and apartments as opposed to houses. This reflects that the younger age group of the population is more inclined towards opting for rentals instead of investing in homeownership. Low incomes, job uncertainty, and high cost of living are the prime factors contributing to this trend.
Furthermore, on a closer inspection of the residential market trends in the US, it is evident that the real estate market is segregated into larger and smaller companies. The top 50 companies in the market dominate and control nearly 30 to 40 percent of the market share. However, smaller companies can compete effectively as they offer expertise in specific localities, therefore creating a stronger local portfolio. Let's now take a look at some of the top real estate companies which include JLL (NYSE:JLL), CBRE Group, Inc. (NYSE:CBRE), and Compass, Inc. (NYSE:COMP).
Prominent Residential Real Estate Companies in the US
JLL (NYSE:JLL), a US-based Fortune 500 commercial real estate and investment management company has clients across 80 countries. The company helps its clients in the construction, buying, and selling of commercial, industrial, hotel, and retail properties. On December 21, JLL (NYSE:JLL) announced that JLL Capital Markets secured a facility of $55.7 million on behalf of Saxum Real Estate, a national real estate investment and development firm. The fund is to finance the construction of a luxury 187-unit housing development in the Northern Liberties area of Philadelphia. This two-phased development project financed through JLL (NYSE:JLL) is expected to complete phase one with occupancy by September 2024, with the second phase targeted for completion in August 2025.
CBRE Group, Inc. (NYSE:CBRE), with a client base across 100 countries, is the world's largest commercial real estate and investment services firm. On November 17, CBRE Group, Inc. (NYSE:CBRE) announced that its Board of Directors appointed Robert Sulentic as the Chair of the Board of Directors, in addition to his existing role as the Chief Executive Officer of the CBRE Group Inc. (NYSE:CBRE). Sulentic is succeeding Brandon Boze, who has been the chair since May 2018, with immediate effect.
Compass, Inc. (NYSE:COMP) is a US-based residential real estate brokerage firm with a platform of 28,000 independently operating agents. On December 15, the company announced that Sally Forrester and Tomer Fridman, representatives of Compass, Inc. (NYSE:COMP), together with The Fridman Group International's Amir Ensani will handle the sales of the homes at Beverly West. The project is a luxury 22-story high-rise with 35 boutique-style apartments. The two specialist teams will work together to ensure the smooth sales of the penthouses and residences at Beverly West, owned by Emaar Properties, a Dubai-based property tycoon.
20 US Cities with the Highest Rental Vacancy Rates
20 US Cities with the Highest Rental Vacancy Rates
Methodology
To list the 20 US cities with the highest rental vacancy rates, we used data collected by the US Census Bureau. The data obtained from the report suggests the rental vacancy rates for US metropolitan areas as recorded in the fourth quarter of 2022. Metropolitan areas in the United States often consist of several cities or counties collectively, while certain larger cities are officially metropolitan areas as well due to their large population and area. For our list, we have highlighted the principal city in each metropolitan area to reflect the high rental vacancy rate of the top 20 US cities. The list is arranged in ascending order of rental vacancy rates.
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20 US Cities with the Highest Rental Vacancy Rates
20. Tampa- St Petersburg-Clearwater
Rental Vacancy Rate: 7.5%
Tampa- St Petersburg-Clearwater, also known as the Tampa Bay area, is a major metropolitan area surrounding Tampa Bay on the Gulf Coast of Florida. Tampa, St. Petersburg, and Clearwater are the three main cities and according to the latest reported data, the rental vacancy rate in Tampa- St Petersburg-Clearwater is 7.5%.
19. Cincinnati
Rental Vacancy Rate: 7.9%
The Cincinnati metropolitan area, where Cincinnati is the largest city, is mainly located in Ohio and Kentucky. It also includes surrounding counties in the US states of Ohio, Kentucky, and Indiana. With a rental vacancy rate of 7.9%, Cincinnati ranks among the 20 US cities with the highest rental vacancy rate.
18. St. Louis
Rental Vacancy Rate: 8.2%
St. Louis, or theGreater St. Louis is a bi-state metropolitan statistical area with its core in both the US states of Missouri and Illinois. The city of St. Louis is its largest principal city, and the rental vacancy rate here is 8.2%.
17. New Orleans
Rental Vacancy Rate: 8.2%
The New Orleans metropolitan area, also known as Greater New Orleans, is the most populated metropolitan area in Louisiana. New Orleans is also the largest regional economy in Louisiana, and the rental vacancy rate here is 8.2%.
16. Tulsa
Rental Vacancy Rate: 8.2%
Centered around the city of Tulsa, the Tulsa metropolitan area is a metropolis in Northeastern Oklahoma. With a vacancy rate of 8.2%, Tulsa ranks among the US cities with the highest rental vacancy rate.
15. Tucson
Rental Vacancy Rate: 8.2%
Tucson is a metropolitan statistical area in the US state of Arizona that ranks among the top 15 US cities with the highest rental vacancy rate. It is centered around the city of Tucson, which is the second most populated city in Arizona. The rental vacancy rate in Tucson is 8.2%.
14. Virginia Beach-Norfolk-Newport News
Rental Vacancy Rate: 8.3%
The Virginia Beach-Norfolk-Newport News, also known as the Hampton Roads metropolitan statistical area, ranks 14th on our list of US cities with the highest rental vacancy rate. According to recently reported data, it has a rental vacancy rate of 8.3%. The area, mainly located in the US state of Virginia, includes the cities of Norfolk, Virginia Beach, Chesapeake, Hampton, Newport News, and Portsmouth.
13. Kansas City
Rental Vacancy Rate: 8.9%
The Kansas City metropolitan area is a bi-state metropolitan area in the US states of Kansas and Missouri. Kansas City is the main city in this metropolitan area, and the rental vacancy rate here is 8.9% according to recently reported data.
12. Knoxville
Rental Vacancy Rate: 9%
The Knoxville metropolitan area, also referred to as Greater Knoxville, is the third largest metropolitan statistical area in the US state of Tennessee. The principal city of the Knoxville metropolitan area is Knoxville, Tennessee. Knoxville has a rental vacancy rate of 9% and ranks 12th on our list of US cities with the highest rental vacancy rate.
11. Dayton
Rental Vacancy Rate: 9.5%
The Dayton metropolitan area, also known as Greater Dayton, is located in the Miami Valley region of Ohio. Dayton is the largest city and the urban center of the Dayton metropolitan area. With a rental vacancy rate of 9.5%, Dayton ranks among the US cities with the highest rental vacancy rate.
10. Indianapolis-Carmel-Anderson
Rental Vacancy Rate: 9.8%
Indianapolis-Carmel-Anderson, also known as the Indianapolis metropolitan area, is the largest metropolitan area that is completely within the US state of Indiana. The main cities in the Indianapolis metropolitan area are Indianapolis, Carmel, Greenwood, and Anderson. The rental vacancy rate in the Indianapolis metropolitan area is 9.8%. It ranks among the top 10 on our list of US cities with the highest rental vacancy rate.
9. Charleston-North Charleston-Summerville
Rental Vacancy Rate: 9.8%
The Charleston-North Charleston-Summerville, or simply Charleston metropolitan area, is an urban area centered around the city of Charleston, South Carolina. The Charleston metropolitan area has a rental vacancy rate of 9.8%.
8. Houston-The Woodlands-Sugar Land
Rental Vacancy Rate: 10.5%
The Houston-The Woodlands-Sugar Land metropolitan statistical area, also known as Greater Houston, is the second-most populated metropolitan statistical area in the US state of Texas. It is also the fifth-most populated metropolitan area in the United States. Greater Houston has a rental vacancy rate of 10.5%.
7. Greensboro-High Point
Rental Vacancy Rate: 11.7%
Greensboro-High Point is a metropolitan area in the US state of North Carolina. It is centered around the city of Greensboro, which is the third-most populated city in North Carolina. According to recently reported data, Greensboro-High Point has a rental vacancy rate of 11.7%.
6. Cape Coral- Fort Myers
Rental Vacancy Rate: 11.8%
Cape Coral – Fort Myers is a metropolitan statistical area in the US state of Florida. The largest and principal city of this metropolitan statistical area is Cape Coral, Florida. The rental vacancy rate here is 11.8%, and it ranks high among the US cities with the highest rental vacancy rate.