US Apartment Market Stable in Q2

Increasing fuel costs helped stabilize the US apartment market, with major cities experiencing a growing demand for rental accommodation in close proximity to where people work, Reis Inc reported on Saturday.

The Real estate research firm reports that the average apartment rent rose 1.1 percent in the second quarter to $994 a month, which is up from the 0.8 rise in the first quarter and narrowly trailing the 1.3 percent increase in the second quarter of 2008.

In an interview with Reuters, Reis Chief Economist Sam Chandan said that despite the U.S economic downturn, large cities such as Philadelphia were beginning to see an increase in demand for apartments closer to communal transport facilities.

"As gas prices go up, particularly in the case of cities that have relatively weak public transportation, there\s some upward pressure on rents as you get closer to downturn or wherever the jobs are located," Chandan said.

Of the top 79 markets that REIS tracks, the New York market remained the tightest with vacancy unchanged at 2.2 percent. Jacksonville, Florida was the weakest with vacancy growing 0.4 percentage point to 10.8 percent.