With home buying continuing to be slow, apartment rental rates are likely to remain steady and even to increase.

According to Mercury News, the Bay Area continues a three year slide in housing starts as October numbers reveal builders have put a hold on starting new projects until the market show signs of improvement.

So far, 2008 data shows a 55.5 percent fall for single family and a 21.2 percent slide for multi-family housing starts according to the California Building Industry Association.

In the San Francisco Metropolitan Statistical Area, the numbers show a decline of 37.8 percent for single family and a 6.5 percent decline for multi-housing.

Housing inventories must be reduced before builders are safe to resume development activities and watching the foreclosure market is essential as this plays a major role in the inventory levels.

Statewide, housing production is expected to be less than 66,000 units; from both single family and the apartment/condo industry. Less is expected for 2009.

A call to lawmakers for a tax credit for new-home buyers is one idea that some are hoping helps with the bloated inventory.

In the meantime, apartment owners should enjoy low vacancy rates and opportunities for rental rates to increase as long as unemployment doesn’t rise too much.

For more information, please visit: http://www.mercurynews.com/realestatenews/ci_11073195

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