How slow is slow? When it comes to the recovery of multifamily rent fundamentals, consider that NAHB senior vice president and chief economist David Crowe resorts to redundancy to hammer home the insipid recovery of business at the site level. “The multifamily sector will lag behind all other housing segments in what is expected to be a slow, lengthy recovery because the retardants to growth are significant,” Crowe says. “Not only is there record vacancy, but there’s a threat of additional competition to rental from all of the foreclosures and distress sales yet to occur.”

The record vacancy figure that Crowe points to is 13 percent, the 2009 annualized national vacancy rate for apartments with five or more units, according to the U.S. Census Bureau’s Annual Apartment Vacancy Rate, part of the Current Population Survey of Housing Vacancies and Homeownership, Series H-111. By comparison, vacancies over the last decade have hovered around the 10 percent mark, with a low of 9.2 percent in 2000 and a previous high of 11.5 percent in 2004.

Where modest rent increases have taken place, they’ve often been offset by concessions, Crowe says. Rental demand also seems to be diminishing at a time when housing foreclosures are mounting and the foreclosed are renting investor-owned condos and empty single-family homes or are doubling up rather than moving into professionally-managed apartment buildings.

Still, the prospect of some 83 million echo boomers entering the market over the next decade offers more than just a glimmer of hope for the longer-term improvement in apartment fundamentals. “There are excellent demographics out there counteracting the current grim picture,” Crowe says. “Not only is the echo boom large in number, but [the housing and financial crisis] we have just gone through will likely make them more prone to be a renter than the generations before them. When we turn this around, rental property is going to be extremely valuable.”