The ninth consecutive quarter of improving conditions for rental property owners doesn't mean renters can't still eat their cake and have it too.

A day after the National Multi Housing Council (NMHC) reported higher occupancy rates, rising rents and increased property sales volume, RealFacts reported renters continue to enjoy rents that remain below levels of a half decade ago.

Rents are indeed on the rise and concessions are waning, but renters still have time to make deals before the rental market fully recovers from the last recession, according to two third quarter 2005 rental market reports.

"Over the past four years, rents have decreased 8.3 percent and occupancy has fallen 2.6 percent, giving renters more choice and the opportunity to trade-up without increased cost," said Carole Latham, CEO of RealFacts.

RealFacts monitors 11,300 apartment complexes, of 100 units or more, in a swath of 15 states concentrated to the west of the Mississippi River, but also Florida and Indiana.

Landlords can also cheer. Seventy-five percent of the NMHC's quarterly survey respondents reported improved demand for apartments, measured by lower vacancy rates, higher rents or both.

Only two percent reported looser conditions, suggesting there are few if any markets where conditions are worsening and a growing number of markets well on the mend.

"Even with record-level single-family home sales, demand for apartment residences by individuals and families continues to strengthen virtually across the board," said NMHC economist Mark Obrinsky.

Some of the rental demand can be attributed to the high price of owner-occupied homes, which force some consumers out of the buying market. Other renters are using apartment homes as cover from the incessant sky-is-falling forecasts.

"If the home ownership market should start to cool, demand for apartments could rise even further," Obrinsky said.

Less of the rental demand can be attributed to the nation's record hurricane season. The NMHC survey asked about the impact of those displaced by hurricane Katrina on apartment markets. Fifty-one percent of the respondents indicated that there has been little impact. Thirty three percent noted that apartment occupancy is up somewhat. Only 11 percent indicated that occupancy is up substantially in their markets, typically in states and communities adjacent to storm hammered areas.

NMCH's quarterly survey, conducted October 11-18, put questions to 57 top executives of apartment-related firms nationwide to tally four indexes.

• The Market Tightness Index, which measures changes in vacancy rates and rents, rose from 80 in July to 87 in October. A score above 50 means more respondents saw improving conditions than saw worsening conditions over the past three months.

• The Sales Volume Index, which measure investor demand, was unchanged at a record 66, but represented the 10th consecutive quarter of increasing sales volume. Those noting higher sales volume than during the previous quarter outnumbered those noting lower sales volume by a ratio of almost 4 to 1.

• The Equity Financing Index, edged down somewhat, but at 54 was the ninth straight quarter the index has surpassed 50. Most, 61 percent of those asked said conditions were unchanged, compared to 30 percent that said conditions had improved or worsened.

• The Debt Financing Index, reflecting the rise in interest rates and underwriting standards tightening, dropped to 38, the first under-50 reading since July 2004.

In line with the council's report, RealFacts reported rents did rise in the past year by 2.7 percent as occupancy increased 1.5 percent, even though rents and occupancy levels in many areas remain below what they were at the height of the dot com-fueled New Economy.

"With few signs that this trend will change, renters continue to enjoy the security of stable rents and apartment availability, while home owners worry about increasing interest rates on ARMs and talk of bursting housing price bubbles," Latham reported.

By region, renters lost out most in the Los Angeles-Long Beach-Santa Ana Metropolitan Statistical Area (MSA) where rents rose 6.3 over the past year and a whopping 18.2 percent over the last four years. Salem, OR rents increased 11.1 percent year-over-year, and 4.4 percent in the third quarter alone. Santa Fe NM rents have rising 9.2 percent in the past year, and 5.5 in the current quarter. Bakersfield, CA landlords posted a 10 percent annual increase in rents and 4.1 percent for the quarter.

Elsewhere, Seattle rents were up 3.2 percent in the last year, but only 2.7 percent in the past four years and in Denver renters enjoyed a 0.2 percent decline in rents over the past year and only 0.5 percent increase in the past four years.

"In summary, third quarter data shows that the general flatness of rents and occupancy levels continues almost across the board. Renters continue to see their housing costs hold steady or even decline, and at the same time, they have the opportunity to benefit from low occupancy levels by shopping around for lower rents or improved housing at no extra cost," Latham said.

Published: October 25, 2005

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.