SAN DIEGO, Feb. 6, 2006 - Real Estate Investment Brokerage Company, the nation's largest real estate investment brokerage firm, recently released its National Apartment Research Report for 2006, which indicates the San Diego apartment market will benefit from tight vacancy and strong rent growth. 

Also included in the report is the firm's annual National Apartment Index (NAI), a snapshot analysis that ranks 42 apartment markets based on a series of 12-month forward-looking supply and demand indicators. San Diego drops two places this year to No. 4.

"The San Diego apartment market will continue to be a top performer in 2006," comments Kent R. Williams, first vice president of and regional manager of the San Diego office. "San Diego's healthy apartment market fundamentals will support prices over the next year, and the long-term investment outlook remains bright. Buyers looking for more affordable options or upside opportunities will likely seek properties in the southern and eastern parts of the county."

Following are some of the most significant aspects of the San Diego Apartment Research Report:

• Owners are expected to raise asking rents 4.6 percent this year to an average of $1,263 per month.
  
  By year end, concessions are expected to account for less than 2 percent of asking rents. Overall, effective rents are forecast to register growth of 5.5 percent this year, pushing the average to $1,240 per month.
  
  

• Vacancy is forecast to decrease 30 basis points by year end to 3.2 percent.
  
  The northeast submarkets will show the greatest improvement, as lower rents attract new residents to the area.
  
  

• San Diego employers will add 36,000 jobs, or 2.8 percent, to payrolls in 2006.
  
  Fueled by population growth and an expanding tourism industry, the educational and health services, and leisure and hospitality sectors will lead the way, with each sector forecast to grow by more than 4 percent.
  
  

• Developers are forecast to add 2,600 units in 2006 after delivering 2,100 units in 2005, reversing a trend of declining completions.
  
  The largest share of new units is concentrated in downtown San Diego, which will result in a temporary rise in vacancy within the submarket.
  
  

• Some of the factors that led to robust price gains in recent years, such as condo conversions and low interest rates, will continue to taper off in 2006. 
  
  There are areas within the metro that remain ripe for price gains. In Chula Vista, particularly the area east of I-805, and San Marcos, new commercial development is making the submarkets more attractive to potential residents.
  
  

Orange County (Calif.) claimed the top spot in the 2006 NAI, surpassing last year's leader, Riverside-San Bernardino (California's Inland Empire). The region's median home price of more than $700,000 makes Orange County one of the least affordable housing markets in the country, which will keep renter demand at high levels. Fort Lauderdale occupies the No. 2 position due to robust job growth and low vacancy. Las Vegas moved up one spot to No. 3, supported by strong condo conversion activity and declining vacancy. San Diego fell two places to No. 4, and New York City-Manhattan climbed four positions to complete the top five. Typically the bottom MSAs in the NAI are markets with above-average vacancy or weak labor markets.