However, as the housing market cools, rentals are once again in demand, liberating landlords in many markets to raise rents at the fastest pace in years. According to Reis Inc., a real-estate research firm, average effective rents - or what tenants pay after taking concessions into account - are expected to rise 3% this year. As recently as 2002, rents fell 1%.

For example, the average rent for a nice two-bedroom apartment in Lee County was up 13.9 percent to $1,017 in 2005. A one-bedroom rose 11% to $845 a month, according to PCMG, a property management company that specializes in multifamily buildings.

The pace of change varies greatly from market to market. Archstone-Smith, which owns apartment buildings in 41 cities, says it is increasing rents 8 percent to 10 percent in New York City and Southern California. And in South Florida, according to McCabe Research & Consulting, vacancy rates are so low that some landlords are raising rents as much as 28%.

Years of soaring house prices (and recent increases in mortgage rates) have simply priced many people out of the home-buying market. The best season to apartment-hunt: between Thanksgiving and Christmas, when rental demand typically slows.

Real-estate agents say that the higher costs for rentals come as strong job growth in recent years has boosted demand for apartments. Tenants forced out of units being converted to condos often have trouble finding another apartment with a similar rent.

Camden Property Trust, a big apartment owner, says it is raising rents in all of its 22 markets. In Miami, Camden now charges an average of $1,319 a month for its apartments, up 7.4% from $1,228 in the first quarter of 2005. In Houston, its average rents rose $20 to $800 over this same period, the company says.

Even with the latest price increases, renting remains a bargain compared with owning in much of the country. At AvalonBay Communities Inc., which owns apartments in a number of major markets, concessions have fallen 50% over the past year. In Chicago, enterprising tenants can rent a luxury condo for about the same amount per month as a unit in an older apartment building.

There are some markets like South Florida where vacancy rates for large apartment buildings are down and rents are up. However, the supply of condos and homes available to rent in the region is growing as investors clamor to rent out properties they are having trouble selling. Owners of large rental buildings fear that this "shadow supply" of rental properties could eventually put a lid on rent increases in some markets where speculation has been rampant.

By M. Sese
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