Apartment vacancies in King and Snohomish counties continued to stabilize in the fourth quarter of last year, but rents fell, according to a local research firm.

Vacancy ended at 6.8 percent, unchanged from the previous quarter, according to Seattle-based Apartment Insights. But rents fell $21 per unit on average, to $1,017 per month. They peaked at $1,076 in the third quarter of 2008.

Rents dropped most in downtown Seattle, Mercer Island, Factoria, Newcastle, Eastgate, Sammamish-Issaquah and Redmond, falling between $84 and $55 per month.

But the vacancy rate is deceptive because it doesn't include recently opened properties now being leased, according to Apartment Insights. With those units in the mix, vacancy is 9.1 percent.

Many more new apartments are in lease-up relative to historical averages, said Tom Cain, Apartment Insights principal. In downtown Bellevue, for example, there is a dramatic difference between the market vacancy rate of 6.9 percent and the gross vacancy rate of 20.8 percent, which includes properties in lease-up, he said. That area has seen more new construction recently than any other submarket in King/Snohomish, he said.

Generally, tenants are willing to pay higher rents for new construction and those landlords offer attractive incentives, said Cain. This forces owners of older properties to increase incentives and spend more on marketing, which diminishes returns, he said.

A total of 2,573 units opened in the fourth quarter in the King/Snohomish market, more than in any other quarter since Apartment Insights began its research there five years ago.

That brings the total of new construction for 2009 to 5,931 units — nearly double the number built in 2008.

This year, 3,326 units are under construction in the two counties, Cain said. Half are in Seattle, a third on the Eastside and the balance in south King County.

With employment declines projected for this year, the 3,326 units are significant, and should drive rents down this year, Cain said.

“It will just be challenging for owners and managers to (keep) rent and occupancy levels from deteriorating,” he said.

Apartment Insights tracts 50-plus unit properties in the King/Snohomish market.