Oct
29

Apartments are the Only Housing Sector That Is Not Oversupplied

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October 24, 2008

By Keat Foong – Multi-Housing News

The apartment market remains healthy although rental demand is slowing, said Ron Witten, president of Witten Advisors LLC, speaking this week at the National Association of Home Builders’ (NAHB) Fall Construction Forecast Conference.

Witten said that apartment occupancy level has decreased by only half a point in the past 12 months, and is now at 95 percent on a national basis. Rent growth continues, but it has declined from 4 to 5 percent at its peak in 2006-07 to 2.3 percent in the second quarter this year.

“Fundamentals are still quite good in the multifamily rental sector,” said Witten.

However, he said that rental demand is “definitely” declining. Witten said the “real threat” to apartments comes from the single-family “shadow” rental market. However, he added that in early-2008 there was a significant trailing off in rental single family move-ins due to renters’ avoidance of living in remote locations because of high gas prices.

Witten forecasts that job losses will continue through 2009 before modestly recovering in 2010, and he said there will be a “strong” 2011.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE:

http://www.multihousingnews.com/multihousing/content_display/industry-news/e3id4724c3e60d478c931536e3f22063c61
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