Should the bubble pop on the owner-occupied housing market and foreclosures sweep the West, as some predict, former home owners won't have problem finding a decent place to rent to hold them over, as "Go West, young man" takes on new meaning.

Rents in 90 western metropolitan statistical areas (MSAs) were fairly stable during the second quarter this year, growing only 2.1 percent from the same period last year. The average apartment rented for $895, according to RealFacts, a Novato, CA-based rental market data analyst.

Bad news for landlords, however, could be a double dose of good news for renters who get low rents and the growing opportunity to buy cheaper housing if their apartment is converted to a condo.

Covering more than 11,000 apartment complexes, RealFacts second quarter analysis found "exceptional" quarterly rent growth only in California's Inland Empire and only 2.3 percent at that. Booming Las Vegas yielded 2 percent rent growth, and the MSAs of Los Angeles-Long Beach-Santa Ana, CA; Portland-Vancouver-Beaverton,OR-WA, and Seattle-Tacoma-Bellevue, WA, all enjoyed a 1.6 percent growth in rents.

"It is significant that three of these five growth markets are not in Southern California," reported Caroline S. Latham, RealFacts' CEO.

There's also plenty of room at the inns, so to speak.

Houston, Dallas-Ft. Worth and San Antonio, TX: Colorado Springs, CO; Indianapolis, IN and Tulsa, OK, all yielded vacancy rates at 10 percent or higher.

When it came low vacancy rates, the best performing markets were, Fresno, CA (2.3 percent), Los Angeles-Long Beach-Santa Ana CA (4.6 percent), and Las Vegas-Paradise, NV, MSA (4.9 percent), and Oxnard-Thousand Oaks-Ventura, CA MSA (both, 4.9 percent).

All other MSAs had vacancy rates above 5 percent.

Instead of rolling out the red carpet with concessions, investors are more and more often prompted by weak rents and high vacancy rates to improve their cash flow by converting their multi-family complexes to condominiums.

A total of 13,840 units in 44 complexes were removed from the rental housing supply as condo conversions in the second quarter this year. That's approximately 44 percent of the total number of units in RealFacts' database converted to condos in all of 2004 and 2005 to date.

While the move can be risky for investors who sweat a period of zero income, and buyers who may purchase a condo not built to today's condo specifications, buyers in high-priced markets may find housing where they couldn't otherwise afford to buy.

RealFacts said among 124 converted complexes in its coverage area, investors where getting an average $107,330 per unit. Even in high-cost areas where investors landed $200,000 or more a unit (Alameda, Contra Costa, San Francisco, Santa Clara, Sonoma, Monterey, Los Angeles and San Diego in California and Houston in Texas), individual buyers -- some of whom may be former renters who won't have to move -- have more and more opportunities to buy a home well below their areas' median prices.

Published: July 29, 2005

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.