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Apartment Forecast: Rents to Climb, Vacancy to Fall

The San Diego apartment market will continue to be one of the nation’s top performers, according to the National Apartment Research Report for 2005, released by Marcus & Millichap, the nation’s largest real estate investment brokerage fund, on Jan. 13.

San Diego held the No. 2 spot in this year’s National Apartment Index, a snapshot analysis that ranks 42 apartment markets based on a series of 12-month, forward-looking supply and demand indicators. The report attributes the strength in San Diego to the combined effects of an improving job market, strong net in-migration and out-of-reach home prices that have driven apartment vacancies down and rental rates up.

The report said that apartment rents in San Diego are expected to increase by 4 percent in 2005, to $1,212 per month. Vacancy is forecast to decline by 30 basis points in 2005, to 3.2 percent. On the construction side, a slight increase in apartment units is expected, from 3,000 new units last year to 3,100 units in 2005.

Heather Bergman

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