Apartment vacancies dropping in East Valley - East Valley Tribune: News

Apartment vacancies dropping in East Valley

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Posted: Tuesday, April 6, 2010 5:21 pm | Updated: 3:23 am, Sat Oct 8, 2011.

The number of vacant apartments is dropping in much of the East Valley as more residents move into the area — or people get tired of staying with the family to save money.

Chandler and south Tempe saw the number of vacancies fall about 2 percent compared with a year ago, and rental experts say they’ve seen an uptick in people looking for apartments.

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“A lot of it has to do with people getting fed up living with relatives or cohabitating,” said Keith Konetzni, a designated broker at Apartment Finders. “They seem to be branching out.”

Falling rents and other perks have gotten more people into apartments, too.

Average rents were $746 at the end of 2009, after peaking at $777 in mid-2008, said Pete TeKamp, a commercial real estate broker with Marcus & Millichap.

Almost every complex offers some kind of break on the basic price. About 87 percent of apartments offer a concession, close to 88 percent at the record high in 2003.

Overall Valley vacancies continue to climb, reaching 15 percent at the end of 2009, compared with 14.7 percent a year earlier.

But four of the seven East Valley submarkets saw vacancies drop. The biggest improvements were in the submarkets of Chandler and south Tempe, where vacancies dropped by 2 percent and are below 10 percent. But vacancies rose to 16.6 percent in northwest Mesa, the only place in the East Valley that’s worse than the Valley average. East Mesa and North Tempe also saw more renters leave. The numbers are tracked by various submarkets, but not broken out for the East Valley as a region.

High-end apartments generally are filling up after cutting rates, TeKamp said. They probably won’t offer many new deals, he said.

“It’s just a matter of time before those landlords begin raising rents again,” TeKamp said.

The least-expensive apartments are faring the worst, with 24 percent or more of them vacant. Those complexes began emptying out as the Legislature was approving tough employee sanction laws that made it more difficult for illegal immigrants to find work, he said.

Rents are close to reaching a low point — or may have already hit bottom in some places, TeKamp said.

Too many apartments were built during the boom of the 2000s, TeKamp said, though construction has nearly stopped. At the end of 2007, 7,952 apartments were in the pipeline. By the end of last year, that dwindled to 558 — a drop of 93 percent.

But as people start filling vacant apartments, TeKamp said renters will still find good deals as apartments focus on retaining tenants with competitive rates.

“The landlords have been so badly burned by what happened over the last couple of years that they might be afraid to raise rents,” TeKamp said.

Apartments are also welcoming people they wouldn’t take in before, loosening their criteria for background or credit checks, Konetzni said. Some apartments would block people with criminal backgrounds but now are looking at each renter to consider what the crime was and how long ago it occurred. Non-violent crimes that happened five or more years ago are less a concern to landlords than when it was easy to find renters, he said.

“They’re saying we’re willing to give people a second chance,” Konetzni said.

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