Marcus & Millichap: Palm Beach apartments look weak in 2010

Multi-family real estate in Palm Beach County will continue to take a beating from high unemployment, according to a national report by brokerage Marcus & Millichap. Asking and effective rents already dropped by 4.3 and 5.8 percent, respectively, during 2009, and bigger price cuts are likely on the way as demand remains low, the firm forecast. Still, Gregory Matus, regional manager of Marcus & Millichap’s Fort Lauderdale office, said that identifying and establishing price trends will remain difficult in early 2010, because rental activity has fallen off considerably over the past 18 months. Palm Beach County will lose at least 2,000 jobs this year, a reduction from the 15,000 shed in 2009, but still a grim indicator for apartment rentals. Market observers expect the addition of 400 new multi-family units to Palm Beach County in 2010, and after climbing 90 basis points in 2009, the vacancy rate in Palm Beach County is forecast to climb another 80 basis points this year to 9.6 percent. TRD