Apartment markets feel crunch as home sales rise

Reports indicate that rent prices fell a record 3.5 percent in 2009.

MPF Research predicts that prices will fall an additional 2 percent next year as the housing market improves.

Robin Miller of Coldwell Bankers Realty in Little Rock says the market is expected to jump this year due to the new homebuyer credit extension.

"We expect that it will spike again since they extended it to a time in April," Miller says.

Those recent projections have forced apartments nationwide to offer huge incentives.

Some apartments in South Carolina are offering up to two months free rent and $100 gasoline cards.

The Arkansas apartment market, however, holds a 93 percent occupancy, so the incentives aren't as drastic but still there.

"Different landlords offer different things, but it's generally about the inventory that's available," says Miller.

Although Arkansas hasn't seen quite the effect other states across the nation have seen, some renters here say the incentives is what really got them.

"The incentive they gave us is they would give us one month rent free here, and that incentive helped us a lot in choosing this place," says Kyle Speed, a local renter.

Apartment vacancy is at 7.8 percent nationwide, this is way up from 2007's 4.8 percent.

Some of this is rooted in the nation's ten percent jobless rate.
Even so, renters say the if you're an apartment incentives are the only way to compete.

"You need the incentive to buy to have that fixed cost that you're going to spend every month," says Speed.