The report says South Florida is feeling little effect from the national economic malaise. "While the economic downturn stunted employment growth in most markets, South Florida managed an increase of 2.7%," the report says.

"Employment growth will continue to strengthen during the course of the year, and strong demographics will ensure the long-term health of the local apartment market," Gene A Berman, senior vice president/regional manager of the firm's Fort Lauderale office, says in a prepared statement.

"Despite the wave of concessions that have been experienced recently, values will continue to climb as investors are willing to pay higher prices in order to capitalize on solid apartment investments in South Florida," Berman says.

The brokerage's report predicts already low vacancy rates will rise slightly over the next year from 5.5% in Palm Beach County, 4% in Miami-Dade and 3.8% in Broward.

"The forecast is for a one percentage point increase in market vacancy, although economic vacancy will be higher as owners offer free rent and other concessions in order to boost occupancy," the report says.

Average asking rents will rise by 2.5%, normally a plus for the property's valuation but not in this scenario, the report finds. "Effective rent gains will be muted as concessions take their toll on (owners') net on investment" numbers."

Average first-quarter monthly rent in Miami-Dade was $866; Palm Beach, $835; and Broward, $873.

The report is certain construction completions will fall to 8,900 units over the next year, down by more than 20% from 2001 levels. But that may turn out to be a positive sign for the market, the report says.

"Population and job growth will remain among the highest in the country, and the continued demand, combined with lower construction levels will serve to strength then local apartment market," the report predicts.

Despite a relatively solid job market in 2001, employment growth will moderate for the rest of the year, the study finds.

"The forecast is for job growth of 1% in South Florida this year as the economic recovery gains steam," the report says. "While labor markets across the country were in chaos in 2001, South Floirda was able to weather the economic storm."