The overall Puget Sound vacancy rate for the first half of 2003 is 7.5%, unchanged from the second half of 2002; however, it is one of the highest vacancy rates on record. "It is necessary to go back to the second quarter of 1992, when overall vacancy was 6%, to find an apartment market as soft as this one," states the report.

The good news is that several economic indicators that tie directly into the health of the apartment market--job growth, population and net migration--are expected to show improvement over the next two years. According to The Puget Sound Economic Forecaster published by Conway Pedersen Economics, employment growth is expected to edge up 0.1% in 2003 and improve to 1.5% in 2004 while population growth is expected to ramp up to a peak of 1.5% in 2007. Net migration, after falling from 2000 to 2002, is expected to increase from 21,100 between 2002 and 2003 to 36,300 between 2004 and 2005, according to the Washington State Office of Financial Management.

Regionwide, monthly rents over the past six months have decreased 2.58% to an average of $0.98 per sf, not including significant concessions, which include one or two months of free rent, according to CB Richard Ellis. In Seattle, rents decreased 3.91% to $1.23 per sf; on the Eastside, rents declined $0.02 to $1.12 per sf. Rents in the Southend fell 2.25% to $0.87 per sf. Rents in Pierce County fell 2.41% to $0.81 per sf.