SAN FRANCISCO, 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 Francisco apartment market will benefit from low housing affordability and strong job 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 Francisco drops three places this year to No. 15.

"Improving economic conditions provided San Francisco apartment owners with much-needed relief last year and will drive additional gains in market fundamentals through 2006," comments Jeffrey M. Mishkin, first vice president of and regional manager of the San Francisco office. "Improving fundamentals will also support additional price growth this year. While large deals will continue to capture headlines, private investors will remain the driving force behind transaction activity."

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

• Declining vacancy will enable owners to raise rents and also reduce concessions in 2006.
  
  The average asking rent is forecast to rise 1.1 percent to $1,609 per month this year.
  
  

• Continued job growth and low housing affordability will drive down vacancy in 2006. A 30 basis point decline to 5.6 percent is expected by year end.
  
  The greatest improvement is expected in the southern San Mateo County submarkets of Redwood City and Menlo Park, where vacancy is expected to fall 50 basis points to 4.2 percent.
  
  

• San Francisco employment growth is forecast to accelerate to 1.8 percent in 2006 with the creation of 17,000 positions.
  
  San Francisco posted growth of 1 percent or 9,000 jobs last year.
  
  

• Developers will deliver 500 units in 2006, down from 600 units last year.
  
  The pipeline of planned projects is expanding, though, especially in the Mission Bay area where developers are set to break ground on a number of properties.
  
  

• Buyers seeking lower-priced assets might look to East Palo Alto and Daly City. 
  
  Median per-unit prices in East Palo Alto and Daly City are $40,000 to $60,000 below the market wide median, and both areas stand to benefit from tighter conditions in the city.
  

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.