Third-quarter occupancy of 94% compares with 95.1% in the second quarter and 97.3% in September 2000. Annual demand averages 700 units but 17,800 new units are waiting to surface from an ongoing pipeline.

"The largest chunk of future supply in the nation," Greg Willett, M/PF's research director, notes in his company's quarterly Atlanta Apartment Report. "Apartment demand will not be able to keep up with these new deliveries, further dampening apartment occupancy."

Apartments are being completed at the rate of 12,597 units per year. In the third quarter alone, 3,640 new units were completed. Property managers and owners at many complexes are cutting rents and offering a mix of concessions to retain residents and attract new tenants, Willett says.