If the actual vacancy rate is 15 percent, and the natural vacancy rate is 12 percent, what does this indicate about the market?

The situation where the actual vacancy rate is at 15 percent, while the natural vacancy rate is 12 percent, indicates that there is an excess supply of rental units or properties compared to the demand in the market. The natural vacancy rate is considered to be a healthy balance that allows for typical turnover and available options for prospective tenants. When the actual rate exceeds this natural rate, it suggests that there are more properties available than needed, which generally points to an oversupply in the market.

In real estate terms, an over-built market means that developers may have constructed too many units or properties relative to the demand. The higher actual vacancy rate emphasizes that many units are not being occupied, leading to potential issues for property owners, such as decreased rental income and increased competition among landlords. Thus, the data presented reflects an over-built scenario, making it the correct interpretation of the market conditions.