The Q1 vacancy rate stood at 2.9%, up from 2.2% in the 2000first quarter, according to a study released by Phoenix-basedHendricks & Partners, a national multifamily advisory firm.That simple number has reverberated throughout the market,decreasing absorption and increasing concessions. Rents, however,have spiked for the last 12 months, ending March 31.

Developers have added 2,575 apartments in the first three monthsof this year, up from 2,348 for the same period in 2000. Andanother 8,000 are expected to be completed by yearend. Demanddidn't keep up with the new construction in the first quarter,falling to 1,876 units from an absorption of 2,498 units in the2000 first quarter.

Even as most vacancy rates rose in many submarkets, SouthAustin's vacancy rate fell to 2% from 3% and San Marcos' droppedfrom 2.2% to 1.2%--the lowest vacancy rate of any submarket in themetro area. In terms of property types, class-A units had thebiggest vacancy rate increases, followed by class B and C units inthat respective order.

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