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Charlotte Real Estate News and Real Estate News/Links from Local and State Resources |
March 9, 2004
RIS Media
Condos Continue To Lead Multifamily Market
RISMEDIA, March 4-The popularity of condominiums continues to surge,
and conditions in the rental apartment market are finally showing signs of
improvement, according to the National Association of Home Builders’
Multifamily Market Index (MMI), a quarterly gauge of multifamily market
activity and builder confidence.
"People across the country are realizing that condos can be an ideal
choice for people who want to enjoy the financial advantages of
homeownership while maintaining the amenity-rich, low-maintenance
apartment lifestyle," said NAHB President Bobby Rayburn, a home and
apartment builder from Jackson, Miss. "We expect that the demand for
condos will continue to rise, especially in urban areas, and particularly
while excellent financing opportunities exist."
The for-sale component of the MMI climbed to 59.5, up six points from the
previous quarter and up eight points from one year ago. Multifamily
builders also expressed confidence that the demand for condos would
continue-the index gauging expected for-sale starts over the next six
months jumped to 62.0.
The MMI is based on a survey of multifamily developers, owners and
managers, whose answers to a series of questions are assigned numerical
values in order to calculate separate indices that track both supply and
demand. An index value over 50 indicates that more respondents view market
conditions as good rather than poor.
Although the rental market remained sluggish in the fourth quarter, with
indexes tracking demand below 50 for all classes of apartments, conditions
are improving slightly. Demand for Class A apartments was up almost 5
points to 40.0 on the MMI from the previous quarter, and multifamily
builders appear optimistic that the next six months will show continued
improvement for both market-rate and affordable apartments.
The indexes tracking builder expectations rose to 58.4, 58.3 and 58.0
respectively for Class A, Class B and Class C apartments. Survey
respondents said the volume of calls from prospective renters was up and
that 66 percent of their new units rented within 90 days during the fourth
quarter of 2003, compared to 57.9 percent in the previous quarter.
"Historically, rental apartment demand has been dependent on job
growth," said NAHB Chief Economist David Seiders. "While the
recession has been over for a while, we haven’t seen enough job growth
to fuel strong rental demand, but with improving economic indicators, we
hope to see a turnaround soon." |
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