Apartment, Condominium Markets Remain Strong
WASHINGTON -- The apartment and condominium market remains strong despite a slight drop in the first quarter, the National Assocciation of Home Builders reported Thursday
Its multifamily production index dropped four points but has been above 60 for seven consecutive quarters -- the longest sustained period of strength since the inception of the index in 2003.
The index reached a level of 52, the fifth straight quarter with a reading above 50. On a scaleof zero to 100, the index measures builder and developer sentiment about current conditions in the apartment and condominium market. The index and all of its components are scaled so that any number above 50 indicates that more respondents report conditions are improving than getting worse.
The index provides a composite measure of three key elements of the multifamily housing market: Construction of low-rent units, market-rate rental units and “for-sale" units, or condominiums.
For-sale units dipped four points to 42 while low-rent units rose two points to 55.
“The apartment sector overall has largely recovered since the downturn, so we have now reached a level of development that is close to equilibrium and can continue at this pace,” said W. Dean Henry, CEO of Legacy Partners Residential in Foster City, Calif., and chairman of the association’s multifamily leadership board. “With that said, there are still certain markets around the country that have room to grow.”
The multifamily vacancy index, which measures the multifamily housing industry's perception of vacancies, rose seven points to 38. With the subindex, lower numbers reflect fewer vacancies. After peaking at 70 in the second quarter of 2009, the subindex improved consistently through 2010 and has been at a fairly moderate level throughout 2011 and 2012.
Published by The Business Journal, Youngstown, Ohio.
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