"A slowdown in development activity and ongoing weakness in thehousing market will partially offset softer employment growth inthe near term, resulting in only a modest uptick in vacancy," saysJohn Leonard, regional manager of Marcus & Millichap's Atlantaoffice. He notes that increased foreclosures and tighter lendingrestrictions may keep potential homeowners in the renter pool for awhile longer.

Approximately 3,400 new rental units are forecast to be builtwithin the Atlanta market this year, down from 4,200 in 2007,Marcus & Millichap stated in its recently releasedsecond-quarter report. Atlanta had been the nation's leading marketfor new apartment construction, averaging 7,800 units annually overthe past ten years.

Construction activity remains steady, with some 4,400 units nowunder way and 10,800 units in various planning stages, Marcus &Millichap reports. Buckhead is the most active submarket forapartment development, with 425 units expected to open by the endof this year, increasing inventory by 2.5%.