WSJ: Real estate market showing signs of recovery

The Wall Street Journal recently wrote that after five quarters of decline, apartment rents rose during the first quarter, indicating that the real estate market is finally recovering from its recession-induced slump.

"Nationally, effective rents, which include concessions such as one month of free rent, rose 0.3% during the quarter compared with a 0.7% decline in the fourth quarter of last year and a 1.1% drop in the first quarter of 2009. Vacancies are tied to unemployment, because many would-be renters move in with family members or double up during a downturn [...] Renters are also staying put longer: the average renter now stays for 19 months, up from an average of 14 months, said Mr. Friedman [chief executive of Associated Estates Realty Corp], and despite low mortgage rates and greater home affordability, fewer renters are leaving to buy homes. 'This is the first time in many, many years that it feels like even people who could afford to buy are making the investment decision not to,' Mr. Friedman said."

While the recovery will be a slow one and "landlords shouldn't expect 'galloping rental growth' until the job market firms up," this increase in rents is a positive sign if you're a condo owner or property manager--especially given that many experts were not forecasting rental growth until the third and fourth quarters of 2010.