Renters are seeing lower costs, concessions from landlords

SALT LAKE CITY — Rents are down somewhat in Salt Lake County, and more than half the landlords are now offering concessions to either keep existing tenants or attract new ones, according to a report released Thursday.

But running contrary to that is the fact that fewer apartments remain empty. The mid-2010 apartment vacancy rate was 5.7 percent, down from 7.2 percent a year ago, according to Commerce Real Estate Solutions, which commissioned the report from a University of Utah expert.

The cost of renting also has decreased on average, with the combined monthly rate for all types showing up as $720, down from $740 last year.

The report also said that 55 percent of landlords are offering such things as lower rents or lower deposits to tenants or prospective tenants. Other incentives include such things as giving tenants a microwave oven, offering a half-month off the first rent payment or not charging a rent deposit.

"It's important to note that it's a very accurate report," said Kip Paul, investment specialist with Commerce Real Estate Solutions. "It is statistically correct."

The report is prepared by James Wood, director of the Bureau of Economic and Business Research at the U.

Paul said the fact that apartment rents decreased by nearly 3 percent is "a big deal in our world."

"If you're a tenant, that means you are getting a good deal," he said, adding that the concessions offered by landlords also represent a significant shift from a few years ago.

One thing is certain, Paul said — apartments remain a good investment.

"In general, from a real estate perspective, all commercial properties dropped in value, but apartments dropped the least. Retail projects, office buildings may have dropped an average of 20 percent, depending on what type of project it is, but apartments retained most of their value. They did decrease a little bit but not a big amount. We still have a very healthy market here," Paul said.

A third factor that will be affecting things soon is the fact that there are about 3,200 apartment units under construction in the area. "Historically, we have added about 1,000 units per year. That's a pretty big injection of new units into the market."

Paul said the increase in apartment construction may be due to a number of influences: it may be safer to rent for people if they feel uncertain about their job security; some people who lost their homes may have to rent; and it is harder to get a mortgage nowadays. In addition, apartments currently are the easiest developments to finance.

"Lenders will finance them because they view the market as stable and solid and healthy," Paul said.

e-mail: lindat@desnews.com