Good News for Tenants

As a result, rents last year rose upward of 7% in many parts of Florida, such as Tampa, Orlando and Palm Beach, and 4% or more in Las Vegas and Washington, D.C. Baltimore tenants faced increases of 4% or more, and 3% in San Diego.

But the once-popular trend of converting rental complexes into condos appears to have had its day. The National Association of Realtors says condo conversion accounted for just 10%, or $9 billion, of the $87.4 billion of multifamily properties trading hands in the U.S. last year. That was down sharply from $30 billion, or almost 35% of the nation's multifamily transaction volume, in 2005.

Not only have condo conversions slowed, many units once destined for conversion are returning to the rental market. Senior economist Scott MacIntosh says the NAR doesn't track condo conversion "reversions," but the trade group is already incorporating the phenomenon into its forecast for rents in major markets. For example, it expects rents in Miami to rise by just 1.09% this year, down from 7% last year.

MacIntosh says the slowdown in rental growth is also quite noticeable in nearby Fort Lauderdale, where rents rose 8% last year but are expected to rise just 4.5% this year.

On the opposite coast, the NAR expects rents in Los Angeles to rise by just 4.45% this year, down from 6.05% in 2006.