Apt. rents could see double-digit declines - Nashville Business Journal:

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After essentially holding steady in late 2008 andearl 2009, effective rents dropped 1.7 percent during the second quartetr of this year. Mid-2009 rents also were 1.7 percent beloa their June 2008 levels. The average apartment rent acroswsthe Dallas-Fort Worth area in June was $753 per the MPF research shows. Job losses in North Texaes have hampered demand at the same time as new suppl is hitting the saidGreg Willett, MPF Research’ vice president of research. "Rent reductions have seemeed inevitable, and now they’re Willett said.
The declining occupancy and rent ratesx show the Texas apartment industry is feeling the effectsz of the national saidWill Balthrope, vice president of investmentws for the Balthrope Group of s. "Across the in this country, we are seeing erosiob of top-line income and net-operating income due to the recession and most specifically due to job said Balthrope, who specializes in the multifamily "Even though Texas was the last state to be affected, our apartment market is tied to the job That being said, we expect to see continued erosion in rent levels due to increasinhg vacancies over the next 12 to 18 In North Texas, the biggest rent cuts came in urban core, the MPF research Effective rents fell more than 8 perceng between mid-2008 and mid-2009 in the Downtown/Uptowbn and Oak Lawn submarkets.
The occupancy rate for Dallas-Fort Wort area apartments was 90% as of Occupancy dropped half of a percentagew point during the second making the decline a full 3 percent for the year endinvgin June. The region had 840 net move-outs duringy the second quarter, which normally is a seasonallh strongleasing period. For the year ending June 30, the regioh had 6,910 net move-outs. The move-outds come at a time when 12,633 units of new supplyy have been added for the year endingJune 30. New apartmentr starts in North Texas almostg completely disappeared duringrecent months, but propertie begun earlier and still in process total 21,331 units, Willet t said.
After the apartments now under constructioare delivered, it will probably be thres years before more units are started in the Dallas-Fortt Worth area, said Brianb O’Boyle, managing broker of the office in Dallas. "When you shut the supplgy off, you'll see occupancies gradually improve and concessions staryto decrease," he said. Investor interesyt in the Dallas-Fort Worth apartment which has been dormant for thepast year, is beginninv to return, O'Boyle said. He said the D-FW apartment market will bouncr back more quicklythan most.
MPF Researcjh predicts that apartment demand in North Texaa will rebound into slightly positive territorhy during thenext year, but "there’ no way that absorption can come anywhere close to the aggressiver completion volume that lies ahead," Willett said. That meanz occupancy will decline further and rent cutswill continue. he MPF Research is forecasting rent declines near the 4 percengt mark for the year endingJune 30, 2010. “Neighborhoods with lots of new supplu still on the way are headed for real Willett said.
“It wouldn’t be surprising to see double-digi t rent drops in areas that include the urban coreof Dallas, northern suburbs like Frisclo and McKinney, and the Fossil Creek area of Tarrantg County.”