Market Pulse for February

Median Condo Sale Price — The median price of existing condos in December 2008 was $181.400 — the ninth straight month of price declines. That number was $2,300 less than November’s figure, and $40,600 less than Dec. 2007’s median price. The only saving grace in this set of numbers is that the fire sale prices are finally producing buyers for some of the unsold and foreclosed condo inventory.Multifamily Starts — For nearly a decade, multifamily starts have hovered around 300,000 a year, give or take a few tens of thousands in either direction. This past December’s 152,000 number — down from a revised 191,000 level for the previous month — suggests that we’re building a bit more than half the units the country needs.  Even though December is not the best time for starts, especially in northern climates, the 211,000 units built in December ’07 seem downright impressive when compared with December ’08.CPI vs. Rent — Now that petroleum prices have returned from the stratosphere, the Consumer Price Index overall rose 3.4 percent rise — the smallest rise since September 2007. But the CPI for rent, which had been below the overall CPI for most of the year, is now trailing by a larger margin. Instead of simply rising by a somewhat less impressive figure, it shows a one-tenth of one percent drop. Rents simply are not keeping up with inflation — and in fact, are seriously falling behind. While that is not to say that rents are dropping everywhere, they are dropping enough in some locations to offset stability or rent growth in others.Building Materials — Down is the operative word for building materials prices. They all fell in December, with the exception of gypsum, which rose only one tenth of one percent. Overall construction materials costs fell 1.2 percent, and among the four prices tracked for Multi-Housing News, plywood had the biggest drop, at 1.1 percent.The LIBOR is down — which is a good thing, because it means that banks are more likely to be lending to each other, a good first step back to stability. The Prime Rate is lower than it’s been in years, and that would be good news if you need to borrow money — and could find someone to lend it to you. And the 10-year Treasury rate is down significantly as well — bad news for new investors, but good for those investors who already have these instruments.To comment, contact Keat Foong at