Apartment Rents Rise More Slowly In West

NAVATO, CA - Apartment rents in the U.S. West climbed at a slower pace in the first quarter amid a decline in occupancies and higher unemployment, which cut demand, according to research company RealFacts. The average monthly rent in 15 U.S. states, most of which are in the West, rose 3 percent from a year earlier to $993, Novato, California-based RealFacts said today in a statement. That was smaller than the 3.6 percent gain in the first quarter of 2007. The average occupancy rate fell to 92.6 percent from 93.1 percent a year earlier, and was below the 95 percent rate deemed to favor landlords over renters, RealFacts said.

The drop in occupancies came as the U.S. jobless rate rose last month to 5.1 percent, the highest since September 2005, and employers cut the most workers in five years, according to Labor Department data released this month. "That is something that really impacts the multifamily market more than anything," said Gerald Cox, director of sales and marketing for RealFacts. "It is very much job-driven."

Rents rose from a year earlier at apartments in all 31 metropolitan areas tracked by RealFacts. The average rent increased the most in the Salt Lake City area, where it rose 9.9 percent to $803 a month. Outside of the West, the smallest increase was in Florida's Tampa, St. Petersburg and Clearwater region, where rents gained 0.3 percent to $863 a month.

Occupancies dropped from a year earlier in 19 of the 31 metropolitan areas, rose in 10, and were unchanged in two, RealFacts said. The lowest first-quarter occupancies were in the Indianapolis area at 90.1 percent and the Houston area at 90.7 percent.

RealFacts tracks rents and occupancies at about 3.2 million apartment units, all of which are in complexes of 100 or more units each. The real estate research company surveys apartment owners on a quarterly basis to obtain rent and occupancy data.

Apartment occupancies are likely being hurt by the ''shadow market'' of single-family homes bought by investors during the housing boom, Cox said. Many investors are now renting out such properties to people who otherwise would live in apartments, he said. "They weren't bought for habitation," Cox said. "No one tracks those being rented."