Friday, March 18, 2011

Multifamily Development Forecast Positive

Two quarterly indices produced by the National Association of Home Builders (NAHB) indicate a return to healthy market conditions for both new and existing apartment and condominium buildings.  The Multifamily Production Index (MPI), which tracks developer sentiment about new construction on a scale of 1 to 100, is at 40.8—up more than five full points since the previous quarter and the highest number since the fourth quarter of 2006.  The MPI component tracking developers’ perception of market-rate rental properties is at 51.7—the first time this component of the index has been above 50 since the second quarter of 2007.

The Multifamily Vacancy Index (MVI) is also positive, declining to 33.3, the smallest number since the third quarter of 2006,and half of what it was a year and a half ago. Smaller numbers indicate fewer vacancies.

“The renewed optimism evident in this index indicates that developers are beginning to increase production in order to meet pent-up demand,” said NAHB Chief Economist David Crowe. “However, the lack of construction financing constrains their ability to do so at levels sufficient to meet that demand.”

“Apartment developers are happy to be back in the business of building new rental apartment homes. The lack of adequate new supply, however, will put inflationary pressure on apartment rents for the next few years,” said Charles Brindell, Chairman of NAHB’s Multifamily Leadership Board and Chairman.

These conditions will increase rents in many areas of the country.  So don't wait - start looking for a new home now in Mercer County NJ or surrounding counties and townships.  Call or email me to talk about your dreams and options.

Joe Giancarli, SA
Real Estate Advisor

Find homes for sale using my new mobile app. Just text JOEG to 87778 and you will be sent download instructions. Once installed on your device, you will be able to do searches and see complete listing details including photos and prices. If your device is GPS enabled you will also see the listings on a map. (Data rates may apply.)

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