February Market Pulse

Commentary and Data Supplied by Robert Sheehan, Consulting Economist for the National Apartment AssociationBuilding Materials Prices: All of the selected building materials prices declined in December with the exception of cement. And cement prices were flat. The housing recession has taken pressure off building materials prices for the past several months. Apartment Starts:Multifamily starts in December fell to their lowest rate since February 1994 and apartment starts were at their lowest point since July 1994. A collapsing condo/co-op market is dragging down the multifamily sector, but rentals are also being impacted by a troubled economy and increased rentals of condo/co-op units. Rent Changes:Net effective rent increases moderated since late summer, but the 4 percent increases in each month in the fourth quarter from a year ago were still very good. High energy prices, a sluggish national economy and lower household growth should restrain rents as we move through the first half of the year. Existing Condos/Co-ops Median Sales Prices: The median sales price of existing condo/co-op units declined slightly in November, but more pronounced drops can be expected in coming months.Sources for Apartment Starts; Rent Changes; Existing Condos/Co-ops Median Sales Prices: U.S. Department of Commerce, Regis J. Sheehan & Associates. This issue marks the final Market Pulse contribution and analysis by Robert Sheehan, who is retiring. MHN would like to express its appreciation to Sheehan for his involvement in the creation of, and his monthly contributions to, this page, as well as for the insights he’s shared with our readers for over a decade.To comment, contact Keat Foong at kfoong@multi-housingnews.com.