Foreclosures are up, and home-born prices are down nationwide, but in many metro areas the account of rents market has improved since 2007

by dint of. Prashant Gopal

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Michael Rodriguez planted a "For Rent" auspice one Sunday morning in the compound of a three-bedroom, two-bath house he owns in Salinas, Calif., a agriculture community 10 miles inland from the Monterey Bay beaches and about any sixty minutes from Silicon Valley.

That appointed time, Rodriguez admitted 34 calls from prospective tenants. "The next day, I was talking to some, and I looked into the bargain and the sign was gone," aforesaid Rodriguez, the broker/owner of Platinum Capital Mortgage & Estate in Salinas. "Somebody was trying to eliminate the rivalry."

Salinas, same much of California, is facing a housing slump and a surge in foreclosures. But the account of rents mart is humming along thanks to its relatively affordable housing costs and proximity to Silicon Valley, at which place high-paying tech jobs are plentiful. Salinas metro circle hall rents increased 5.6% in the third part divide, compared with the same period last year, and the vacancy rate has fallen to 2.4%, unit of the nation’session lowest.

BusinessWeek.com asked Dallas room information company AXIOMetrics to rank the metropolitan areas with the best and worst effective rent (the asking solution of continuity less any landlord lease concessions) and found that, of the 88 U.S. metro areas tracked by the company, Salinas was the sixth-strongest. In Tacoma, Wash., where there is an overflow of military personnel from nearby bases looking for apartments, rents increased 7.8%—the biggest increase in the nation. Salt Lake City, Tulsa, Oklahoma City, and Long Island, N.Y.—areas with robust job markets—also made the top 10.

"The culminating point rental markets were less impacted by means of the housing bubble blasting," said Ronald G. Johnsey, president of AXIOMetrics. "The job growth in these markets is probably still good, though the rate of job growth is declining."

Florida and Arizona dominated the list of metro areas with the biggest crack drops. Housing prices in those states are crashing, and so many people who could not sell their homes have instead put them on the mart as rentals. Those single-family home rentals are competing for tenants through apartment complexes. Effective rents acquire fallen as much as 9% in the put down Florida markets—Naples and Cape Coral—where vacancies have jumped to relating to 17%. Apartment landlords are sacrifice two or other months of free divulsion in some cases to fill vacancies.

The single-family home rentals are "affecting the apartment rental market," said Jack McCabe of McCabe Research & Consulting in Deerfield Beach, Fla. "That’sitting going to continue to happen until you see a decline in the for-sale inventory. Once that happens, people renting out these units will end up putting them up for sale and that will lessen the rental inventory."

Keith Oden, president and trust manager of Houston’s Camden Property Trust (CPT), one of the nation’s largest real estate investment trusts concentrating on multifamily housing, says the weakness is concentrated in places such as Arizona, Florida, and Nevada, where the job market is weak.

But in much of the country, rents are strong. People are happy to sit on the sidelines and rent till the for-sale market returns, he said.

"Fewer people are moving abroad of our apartments to buy homes," Oden said. "Last year in our portfolio, about 20% of tenants moved out to purchase a domestic. In the before anything else six months of this year, it was 14%."

In Tacoma, which continues to experience job growth, many people are renting because—with increasingly restricting lending standards—it’s tough to qualify to purchase, said Dick Beeson, factor/owner of Windermere/Commencement Associates. Tacoma is attractive to renters because it is an affordable alternative for people who work in Seattle, just over 30 miles away. Beeson said he expects rents to begin stabilizing next year as more investors lease out homes they couldn’t sell.

In changeable times, population separation, reported Walter David Smith, conductor of Belhaven Residential, which owns 315 apartments near downtown Jackson, Miss., the third-best apartment market on our list. The demand by reason of apartments was boosted in Jackson after Hurricane Katrina flooded the coastal areas and forced refugees inland.

The tasteless housing market is keeping people in leases, Smith aforesaid.

"This period last year, we probably had 10% vacancy," Smith said. "Right now, we’re at full occupancy."

Eric Thomsen, a 32-year-old computer network analyst who rents a one-bedroom apartment in Jackson for $509 a month, is not forward to commit to anything more than a one-year lease.

"When the regulation is unsure, you’re unsure," Thomsen said. "It’s easier to work your way out of a lease than a mortgage."