U.S. apartment market worsens with economy

Asking rents fell by 0.6 percent to $1,046 per month, the largest single-quarter decline since Reis began reporting quarterly performance data in 1999.

Effective rent, which factors in months of free rent, and other concessions and freebies, fell 1.1 percent to a monthly rent of $984.

Some 22,833 units came online in the first quarter of 2009, and Reis expects a total of over 90,000 units to come online through 2009.

Many heads of apartment real estate investment trusts expect that revenue in the best markets could be flat on a year-over-year basis, David Neithercut, chief executive of Equity Residential (EQR.N), said last month in a conference call in which he was joined by Camden Property Trust (CPT.N) CEO Ric Campo, Home Properties (HME.N) CEO Ed Pettinella, and Mid-America Apartment Communities Inc (MAA.N) CEO Eric Bolton.

Neithercut said landlords were giving generous concessions in order to maintain occupancy rates.

In the New York metropolitan area, the largest U.S. apartment market, the vacancy rate rose 1.1 percentage points to 3.4 percent in the first quarter -- the largest single-quarter increase since at least 1999. Effective rent fell to $2,728 a month, down 2.6 percent from the prior quarter.

The decline was exceeded only by the San Francisco area, where the effective rent fell 2.8 percent to $1,775.

(Reporting by Ilaina Jonas; Editing by Gary Hill)