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BloombergBy Daniel Taub
April 22 (Bloomberg) -- Apartment rents and occupancy rates dropped for the third straight quarter in the U.S. West and South as the recession led to a rise in unemployment and forced some renters to combine households.
The average monthly rent dropped to $978 in the three months ended March 31 from $993 both in the previous quarter and a year earlier, Novato, California-based RealFacts said in a survey of more than 12,500 apartment complexes. The occupancy rate fell to 91.4 percent from 92.2 percent in the fourth quarter and 92.6 percent a year earlier.
The U.S. unemployment rate rose in March to the highest level since 1983, the Labor Department said earlier this month. The economy lost 663,000 jobs in March, bringing losses since the slump began to about 5.1 million. The increase in unemployment is a primary reason for the decline in occupancies, said Caroline Latham, owner of RealFacts.
“Unemployment is creeping up, and that usually means a reduction in demand for apartments,” Latham said. “If they’re young singles, they band together and share an apartment or they go back and live with their parents.”
The Bloomberg Real Estate Investment Trust Apartment Index has fallen 23 percent this year, compared with a similar drop for the Bloomberg REIT Index and a 7.2 percent decline in the Standard & Poor’s 500 Index. The apartment index includes 13 companies, including Chicago-based Equity Residential, the largest U.S. REIT that owns apartments, and Denver-based Apartment Investment & Management Co.
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http://www.bloomberg.com/apps/news?pid=20601213&sid=aAsUe67bfP8c&refer=home
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