Real-Time Availability Rate (RTAR)
(Total Number of Currently Vacant Apartments + Total Number of Apartments Becoming Available in the Future) / Total Number of Apartments = Real-Time Availability Rate
The Real-Time Availability Rate (RTAR) goes a step further at giving us future indicators of the economy and absorption of units. It’s a snap shot of what is coming, and for property owners with larger portfolios, they can start making proactive adjustments to rent pricing based on future data. RTAR takes the total number of apartments that are vacant right now, plus all of the apartments that are becoming vacant in the future, and divides that number by the total number of apartments.
This gives us a snapshot of the total percentage of apartments that will become available in the near future. Historically the (RTAR) that we have tracked will vary from 2% – 6.5% depending on the time of year and other factors. If we saw an (RTAR) greater than 7% it would be cause for concern of pricing power. If we see a RTAR higher than 4 percent going into August it can signal a potentially weakening market.
In any event, unrented units going into August generally start to see an erosion in pricing power, as many landlords decrease rental prices weekly in August to avoid vacancy. Experience through monitoring web traffic has indicated as high as an 80% decrease in apartment searches after 8/15 each year. Therefore it is important that landlords follow best practices based on the advice provided through the introspection of the data and competition currently in their marketplace. For best apartment leasing strategies; please feel free to consult our team on the best course of action for your portfolio. Not all leasing or property management companies spend the time or money to properly analyze a property owners portfolio.
Our current RTAR is 1.15% which looks to be very tight considering we are in the second week of October. We expect this number to stay in this range and…