Economy blamed for more empty apartments

Economy blamed for more empty apartments

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SALT LAKE CITY -- The number of apartments sitting empty in the Salt Lake area is way up over a year ago, and the main reason is the economy.

Commerce CRG's 2009 Apartment Market Report, out this week, cites a combination of factors for the increase. First, more apartment complexes have been built. Second, more people are either sharing apartments or moving in with family members to save money. And third, a number of so-called "failed condo projects" -- developments intended to be purchased rather than rented -- are converting to rentals because of decreased sales.

Employment in SL County is down 20,000+ jobs in the past year. Managers report job losses have been the principal cause of higher vacancy rates. -Commerce CRG

Investment specialist with Commerce CRG Kip Paul says it all adds up to more empty apartments. "All of those combined have taken us from roughly a 4.5 percent vacancy rate last year to over 7 percent this year," he said.

But it's good news if you're a renter, because landlords are wheeling and dealing. Paul says concessions, freebies or add-ons intended to entice you to sign a lease are offered by about 85 percent of the larger apartment complexes. Just a few years ago, he says only about 10 percent of the larger complexes offered deals like free rent, microwaves or even TVs to lure in new tenants.

**Change in average rental rates by type of unit**
Unit Type 20052006200720082009 Change 08-09
One Bedroom $541$570$644$703$654-7.0%
Two Bed/one bath $601$626$695$760$723-4.9%
Two Bed/two bath $730$758$842$915$834-8.9%
Three bed$831$865$950$1,066$1,000-6.2%

Commerce CRG

And, Paul says Salt Lake is doing much better than just about anywhere else in the western U.S. "I'm not familiar with any other city or community that is weathering the current [economic downturn] as well as Salt Lake City," he said. "And I believe that once we work through the problems that we're currently involved with, Salt Lake is on good, solid footing, and well-poised for continued growth, once we get through these current tough times."

For more information, you can view the 2009 Apartment Market Report here.


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Becky Bruce


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