ATLANTA-With solid job growth and a slowdown in construction resulting in positive absorption, the apartment market will show improved vacancy rates, according to a Marcus & Millichap research report.

"The supply side has been constrained so there are fewer units available for rentals," John Leonard, a vice president of Marcus & Millichap and regional manager of the firm's Atlanta office, tells GlobeSt.com. "A lot of developers are focusing on for-sale product rather than for-rent."

According to the report, employment growth will increase 2.5% in 2006, a net gain of 60,000 jobs. Employment grew by 2.9% for the 12-month period which ended in March, for a net gain of 67,800 jobs. At the same time, construction of new apartment buildings has slowed as builders continue to focus on condominiums and townhomes. Approximately 3,800 units are slated for completion in 2006, down from last year's total of 5,100 units.

As a result, vacancy is expected to improve 60 basis points to 7.4% by the end of the year. Vacancy for class A properties is 7.2%, while vacancy for class B/C properties is 9.6%. With decreased vacancies, owners are expected to raise rents. Asking rents are forecast to increase 1.2% to $834 per month, while effective rents will jump 3% to $751 per month as owners reduce concessions. Investment activity has also been strong. At the end of the first quarter, the median price per unit was $56,000, up 11% from a year ago, the report states. "The market is really improving so we're seeing a lot of investors attracted to the area," Leonard says.