Apartment rents rose in 2005 through most of the West
SAN FRANCISCO – Apartment rents rose throughout most of the West last year in the latest sign that landlords are slowly regaining some pricing leverage, according to a report to be released Thursday.All but two of the 20 major Western markets surveyed by real estate research firm RealFacts Inc. ended 2005 with higher apartment rents than the previous year.The biggest increases were concentrated in southern California and southern Nevada, where the regional economies generally have been stronger than other parts of the West.Apartment rents in the bustling inland area of Riverside and San Bernardino counties climbed 7.3 percent during 2005 to an average of $1,086.Even though that was the West’s largest annual rent increase, a sign of weakness loomed in a region that fancies itself as the “Inland Empire.” Average occupancy rates in the two-county region dropped from 95.3 percent in 2004 to 91.6 percent in 2005, a downturn that could force local landlords to back off the steady rent increases that have been imposed for several years.The market spanning Los Angeles and Orange counties demanded the West’s highest rents at $1,459, a 6.6 percent increase from 2004.The West’s next six most expensive apartment rents were also in California, RealFacts said. Outside that state, the Seattle market fetched the highest apartment rents with an average monthly price of $904, a 3 percent increase from 2004.Tucson, Ariz., offered the least expensive apartments at an average of $616, down 1.4 percent from 2004. Colorado Springs, Colo., saw a similar decline, depressing average rent to $709. Those were the only two Western markets surveyed by RealFacts to show rent decreases.Meanwhile, the San Francisco Bay area’s apartment market began to rebound from four years of steep rent decreases triggered by a technology slump that prompted many renters to move away in search of new jobs. At the same time, many renters with secure jobs bought homes to take advantage of low interest rates.The average apartment rent in the five-county San Francisco metropolitan market covered by RealFacts rose 3.7 percent to $1,359 at the end of 2005. The apartment market was nearly as strong in the San Jose metro market, the heart of Silicon Valley, where the average rent climbed 3.5 percent to $1,330, RealFacts said.The average occupancy rates in both of those Bay Area markets are now hovering around 95 percent, typically a threshold that foreshadows higher rents.—On The Net:http://www.realfacts.com
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