NAHB Says Condo Market Shows Improvement

By Nicholas Ziegler, News Editor, Commercial Property Executive

The National Association of Home Builders announced that the Multifamily Production Index, or MPI, reached its highest rating since the third quarter of 2005. The index reached 51 on a 100-point scale, up from 49 in the last quarter of 2011, marking the seventh consecutive month of an increase.

“In spite of continuing difficulties in the capital markets, it appears that new construction is underway,” W. Dean Henry, president of Legacy Partners Residential and chairman of NAHB’s Multifamily Leadership Board, said in a press statement. “This is certain to help satisfy some of the pent-up demand that has occurred over the past several years.”

Further, the association’s Multi-Family Vacancy Index, which measures the sector’s perception of vacancies, dropped to 31—its lowest reading since the index’s creation in 2003—which means fewer vacancies in the apartment market. The MVI has decreased considerably in the last three years, peaking at 70 in the second quarter of 2009.

“Multifamily construction continues to be a bright spot in the overall housing market,” NAHB Chief Economist David Crowe said in a press statement. “However, as indicated by the MVI, demand for apartments is now quite high, and production is still very low in a historic context and in the context of what we project is necessary to meet long-term demand.”