Market Statistics for October 2009

Multifamily Starts: Multifamily starts for buildings with more than five units remain volatile. At 115,000 units at an annual rate—up from the previous month’s 85,000 units—it does read as a slight improvement. But it is nowhere near the 200,000-300,000-unit levels of 2007—a level that most agree would be necessary to produce multifamily housing adequate to future demand. The best that can be said for multifamily starts at this point is that they have appeared to hit bottom at around 100,000 starts (their average for the last three months). Starts are likely to continue to fluctuate around this number for the next several months as financing for new projects remains very difficult to obtain.

CPI vs. Rent: The overall Consumer Price Index continued to decline on a year-over-year basis. The rent segment is still on the positive side, but the rate of increase continues to slow. Last year at this time, the rate for the rental segment was 3.8 percent higher than the previous year’s level. However, general inflation was up 5.4 percent for the same period. Although the most recent rise in rents is only 2 percent higher than last year’s level, that is clearly better than the 1.5 percent decline in the CPI.