WEST PALM BEACH, Fla.,
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 West Palm Beach apartment market will benefit from stronger
employment growth, resulting in higher occupancies and rental rate 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.
West Palm Beach improves
seven places this year to No. 7.
"The
Palm Beach County apartment market will post stronger fundamentals in 2006,"
comments Gene A. Berman, managing director of
and regional
manager of the Fort Lauderdale office. "Apartment demand arising from economic
growth and strong in-migration will help to sustain extremely low vacancy
rates in areas such as Boynton Beach and Boca Raton this year."
Following are some of the most significant aspects of the West Palm Beach
Apartment
Research Report:
-
Asking
rents will advance 3.1 percent to $1,068 per month, while effective rents
are forecast to expand 4.1 percent to $1,020 per month.
Lower
vacancy will reduce the gap between asking and effective rents this year.
-
Vacancy
in Palm Beach County is expected to post a 30 basis point reduction to 5.3
percent during 2006.
Limited new development, continued loss of
inventory to the condo conversion market and demand spurred by population
growth will lead the decrease in vacancy this year.
-
After
posting a 3.5 percent gain last year, total employment is expected to grow
by 3.8 percent, or 22,000 jobs, in 2006.
Strong gains in the educational and health
services sector will help boost demand for apartments, as many of these
workers are unable to afford the county's median-priced home.
-
Overshadowed
by the region's condo market, apartment construction has tapered off over
the last year.
Approximately 700 units will be delivered in
2006, compared with 800 units last year.
-
Condo
converters have steadily made their way up the coast from Miami and might
remain in Palm Beach County if demand for high-priced condos remains strong.
Apartment investors may want to consider assets in solid rental markets such
as Lake
Worth and Boynton Beach, where gross revenue is expected to increase by more
than 6 percent during 2006.
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.
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