- The Washington Times - Sunday, September 18, 2005

The apartment market in the Washington area is due for an upswing as employment increases but the pace of home sales slows, according to a new report.

The result is likely to be higher rents for tenants and bigger profits for landlords.

“Steady job growth and population gains are stimulating improvement in the Washington metro-area apartment market this year,” said Chuck Blessing, sales manager for the Washington office of Marcus & Millichap Real Estate Investment Brokerage Co., which did the report.

Washington-area employers are on track to add 64,000 jobs this year, a 2.2 percent gain from 2004.

As a result, apartment vacancies are expected to fall to a regional average of 4.6 percent by the end of the year as demand rises, according to the report. If current trends continue, rents would rise 2.6 percent this year to a monthly average of $1,190.

Rising rents in the Washington area are mirrored in other large cities.

The National Association of Realtors predicts that average rents nationally will rise by 2.5 percent this year, about the same as in the Washington area.

“Washington is among the tightest vacancies in the country,” spokesman Walt Molony said.

The five cities with the strongest apartment demand are Norfolk, Washington, Los Angeles, Miami and Riverside, Calif.

The U.S. population “is growing faster than the supply of housing,” Mr. Molony said.

Marty Regalia, chief economist for the U.S. Chamber of Commerce, said: “We’re probably a little bit different in degree to many other places around the country, but not other metropolitan areas. I think nationally demand for apartments is going to pick up as long as the economy continues to grow.”

In many cases, high home prices leave residents no choice but to rent, particularly first-time home buyers.

“I don’t know how entry-level people buy anymore,” Mr. Regalia said. “They can’t get into the homeownership market.”

Early indicators show the housing boom is peaking, possibly making home-buying more affordable and reducing economic pressure to raise rents.

The latest Commerce Department reports show the median price of a new home nationwide dropped to $203,800 in July from $219,500 in June after rising steadily earlier in the year.

Another scorefor Silver Spring

Silver Spring’s first new hotel in 30 years is open for business, which achieves another milestone in Montgomery County’s $1.5 billion renovation of the downtown area.

The 179-room Courtyard by Marriott Silver Spring Downtown is designed to serve the growing number of business travelers to the 21-acre, mixed-use development that is the focal point of the city’s redevelopment. The hotel is within walking distance of the Discovery Communications headquarters as well as new restaurants and retail outlets.

In other news …

• Development company Starco Properties has announced plans to build Stoneleigh at Westfields, a 220,000-square-foot top-tier office development along Northern Virginia’s Route 28 corridor. The project will include two five-story buildings that meet Department of Defense security standards.

• Property Lines runs Mondays. E-mail Tom Ramstack at [email protected]

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