Apartment operator Associated Estates Realty Corp. has reported today that the worst may be over for the industry as it saw its lease rates posting an almost one percent gain in May, following the Ohio-based company’s steepest decline of 8.8 percent in December.

Company chief executive Jeffrey Friedman conceded that the upturn was very minimal but he stressed that it was still a positive sign of the looming turnaround that the apartment sector has been waiting, as more good news of misfortune reversals for many apartment-building landlords came trickling in.

Many operators are reporting that plunging rent and lease figures have been halted with some even revealing that occupancy is picking up as property research company Green Street Advisors observed that demands may have struck bottom in the first quarter, which is two quarters earlier than most experts have projected.

The rosy figures could be pointing to spiralling hiring rates even as the Labor Department had earlier revealed that hiring fluctuated in May though it did not ruled out that the recovering economy may be picking up on more jobs, which should mean more capacity too for workers to keep a rented unit or even upgrade as conditions further improve.

Analysts are also predicting that most renters would opt to remain on their lease instead of jumping into homeownership as the government-sponsored tax credit for first-time home-buyers were slowly winding down, with Mr Friedman offering that “renters could wait out for the turbulence to lapse in the single-family market.”

In a report by Axiometrics, nationwide rents and leases increased by 2.8 percent nationwide and in tracking the national apartment market scene, the agency said that biggest improvements were seen in Tacoma, Washington and San Jose, California, with gains of 94 percent and 6.5 percent respectively.

The tracking agency said that both locations derived their rent climbs to technology-related hiring as it added that East Coast markets also saw some pick ups with Miami collecting some four percent increase though nearby Cape Coral-Fort Myers suffered a dip of 4.8 percent while on the far end Las Vegas experienced a slight decline of 0.6 percent.

Axiometrics said that in spite of the gains, overall rents still remained five percent lower from the 2008 high as it cautioned that the recent recovery could still suffer some slow downs and even reversals should the job market declines further or the share market is hit by another meltdown.

On his part, Green Street analyst Andrew McCulloch warned that the unstable job market could eventually pull down the ongoing rent growth but apartment operators are upbeat that the good results seen so far would lead to substantial earnings guidance this year.

In that light, a number of apartment owners are scrambling to hike their lease levels in an apparent attempt to spike up earnings target with Denver-based UDR Inc leading the pack by imposing a four percent rent hike for its estimated 50,000 units nationwide, going to an average of $1,100 per month.

Also, AvalonBay Communities Inc had indicated last week that its 2010 earnings guidance would see some upward movements as it announced that this year’s operations funds would range from $3.85 to $4 a shares, which is an actual upgrade from the maximum $3.85 range set in February.

The company attributed its gains to encouraging employment levels seen earlier this year and further buttressed by household formation and homeownership trends underway in the area, with Sandler O’Neill & Partners upward revising its earnings guidance for several firms such as Equity Residential, UDR and AvalonBay.