Slump favoring some renters

Homes, condos on market raise vacancy rates

A leasing sign for new apartments yesterday in Tampa, Fla. In the toughest markets, apartment owners are offering lease incentives to snag renters. (Chris O'Meara/Associated Press)

NEW YORK - Renters may be the biggest winners in the current housing slump, especially in places like Florida, Las Vegas, and Southern California, that have thousands of vacant for-sale and foreclosed homes and condos on the market.

Apartment vacancies are edging up in many areas of the country as frustrated sellers instead try to rent out their homes and condos in once red-hot housing markets. And that is making it harder for landlords to raise rents. In the toughest markets, apartment owners are even offering lease incentives to snag renters.

This "shadow market" of investor-owned homes and condos accounts for almost half of the rental stock, and attracts displaced homeowners more often than your typical apartment renter.

After staying relatively flat last year, apartment vacancies bumped up in the first quarter from the end of last year, the research showed. The vacancy rate is expected to rise by a half-percent this year to 6.1 percent as the market absorbs about 3.3 million more rental home and condo units.

The national trend, however, belies what's happening in the country's most beleaguered housing markets. Areas that experienced explosive condo development and conversions of apartments into condos for sale are finding those units unloaded onto the rental market because developers can't sell them.

Sharp increases in vacancy rates plague most Florida markets where condo development was rampant.

In Jacksonville, for example, rental vacancies spiked to more than 10 percent in the first quarter, up from 5.8 percent in the prior year.

Since the beginning of the year, the number of rentals on the Miami and Fort Lauderdale markets combined has risen more than 11 percent to 10,000 from 9,000.

In San Diego, single-family homes being placed on the rental market are hurting luxury apartment communities, said Rick Snyder, president of the California Apartment Association.