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CONDO SALES STRONG, DEMAND FOR RENTALS WEAKER
| Condominium sales remained strong in the third quarter, but demand for rental apartments continued to lag, according to the most recent Multifamily Market Index (MMI) report released last week by the National Association of Home Builders (NAHB). "Condo sales have exceeded everyone's expectations over this past year and production of new units hasn't kept pace with consumer demand," said NAHB Chief Economist David Seiders. "Meanwhile, apartment demand has been hurt by a weak job market and low interest rates that have drawn some current and prospective renters into homeownership, but an improving economy should set the stage for greater strength in this sector down the road." The MMI is based on a quarterly, nationwide survey of multifamily builders and property managers who are asked a series of questions about current market conditions as well as their expectations for the next six months, where a rating of 50 indicates that the number of positive responses is about the same as the number of negative responses. The MMI's component index gauging starts of for-sale units increased from 53.44 in the second quarter to 53.47 in the third quarter, while the component gauging starts of affordable rental apartments fell to 38.82 from 42.86 in the previous quarter. The MMI also indicated continued weakness on the demand side for rental apartments. The index tracking calls from prospective renters dropped from 49 in the previous quarter to 38. The percentage of apartments rented within the last 90 days was also down, from 67.7 percent in the second quarter to 57.9 percent in the third quarter, according to the report. |