Apartment vacancy rates falling in Wichita

Apartment vacancy rates in Wichita are falling, even though the local economy remains down, according a recent survey of the city's complexes.

According to a January survey by Wichita Apartment Guide, 8.8 percent of apartments in the Wichita area were vacant. That's down from 10.5 percent in January 2010.

"It's firming a little," said Bob Hanson, president of Weigand-Omega, the city's largest apartment manager.

He noted that even though this recession has generally been worse than the 2001-04 downturn with higher unemployment rates, it has been better for landlords. This downturn lacks a housing bubble and the aggressive marketing of cheap credit to lure apartment dwellers into homes.

Vacancy rates for local apartments peaked at 15.5 percent in 2004 at the height of the subprime boom.

This time around, Hanson said, tight credit has put a floor under the vacancy rate for landlords. Landlords are generally feeling comfortable enough to eliminate special offers, such as free months' rent.

"It shut the back door," he said. "And, with specials going away, you don't have many people moving from A to B seeking free rent, so that stabilizes the situation, too."

The survey showed that some landlords have even been able to raise rents on studio, one- and two-bedroom units, while prices for the larger, higher-dollar units are lower.

The housing crisis might be helping the apartment industry these days as people losing their homes seek housing. Although the most vulnerable subprime borrowers have mostly already moved through the system, regular borrowers continue to lose their homes at ever-higher rates.

According to national real estate data firm RealtyTrac, the owners of nearly 2,500 Wichita-area homes in 2010 received at least one filing in the foreclosure process.

As the economy improves, the apartment market will continue to improve, Hanson said.

"It will gradually improve as people in some households get new jobs and move out," he said.

But the January result was a surprise to some landlords, for whom the last year was harder than 2009.

Larry Dobbs, who owns a 45-unit townhouse complex and a number of rental homes, said he's started to advertise for the first time.

His overall occupancy rate is still above the city average, he said, but it's not where it was.

"It's more difficult now than it's ever been," he said.