January Market Pulse

Commentary and Data Supplied by Robert Sheehan, Consulting Economist for the National Apartment AssociationApartment StartsMultifamily starts rose for the third time in four months in November. Rental housing starts are offsetting declines in condo/coop activity. It is not clear that further strengthening will occur in the short run because low household formations and waning consumer confidence are limiting factors.Rent ChangesStrength continues in net effective rent increase with a 4 percent rise in November from the same month a year earlier. Overall consumer prices did exceed rent increase for the first time in 15 months in November as a result of the sharp increases in energy prices. Existing Condos/Co-ops Median Sales PricesThe median sales price of existing condo/co-op units is relatively flat and will have to decline significantly to work off the unsold inventory. Building Materials PricesAll of the selected building materials prices declined in November with the exception of cement. And cement prices were up 1.2 percent as a result of energy costs. Sources for Apartment Starts; Rent Changes; Existing Condos/Co-ops Median Sales Prices; Building Materials Prices: U.S. Department of Commerce, Regis J. Sheehan & Associates.To comment, contact Keat Foong at kfoong@multi-housingnews.com