MIAMI-Despite fears that a slowdown in the condominium market would increase the supply of rental units, the apartment has showed continued strength, according to a report by Marcus & Millichap Real Estate Investment Brokerage Co.

"The local apartment market boasts low vacancy rates, which is a product of solid job growth, limited new construction and the removal of existing stock for conversion to for-sale condos," says Kirk Felici, regional manager of Marcus & Millichap's Miami office.

The apartment market is being buoyed by a number of factors, including positive employment trends. Employers in Miami-Dade County are projected to add 16,000 jobs in 2006, a 1.6% increase over last year. Nearly one-half of those jobs will hail from the construction and professional and business service sectors. In addition, there are only 900 apartment units slated for completion in 2006. By contrast there are 18,400 condominiums, including condominium conversions, planned or under construction.

Despite the strong market conditions, the vacancy rate is projected to increase to 3.7% due to the return of some converted units to the rental market and the potential relocation of high-end renters discouraged by a diminished supply of class A rentals. However, high occupancy rates will result in higher asking rental rates, which are forecast to increase 3.2% to an average of $1,058 per month. Net effective rents are projected to rise 3.6% to an average of $1,014 per month.