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July Market Pulse
Published: July 01, 2008

Median Condo Price:
 After a spring selling season in which the median price seemed to suggest strongly-motivated sellers and buyers willing to wait for lower prices, the May median condo price perked up. This may be a price uptick that represents sales in particular local markets – one that could be corrected downward in next month’s numbers. Or it might be an indication of movement toward market price stabilization. Time will tell.




Building Materials Prices: 
In the past six months, prices for construction materials have continued to rise, but slowly – a few tenths of a point every month. But this month’s 2.1 percent rise in the composite index is a rate of increase that is more than double the 1 percent rise of the previous month. The current number reflects a 7.1 percent rise in the cost of softwood lumber and a 2.4 percent rise in the cost of plywood, two of the components of the materials index. Some of this rise could be attributed to the rise in fuel prices, which would have an impact on all the costs of getting the wood products from the forest down the line to the distributors.




Multifamily Starts:
Starts data continued to reflect the inherent volatility of multifamily relative to single family. This month's number—280,000—is quite close to NAHB's newly revised multifamily forecast for 2008, which anticipates 285,000 units being built by the end of the year.



Rent Changes:
There may still be a half-dozen people in the U.S. who haven't noticed that costs of food and fuel have continued to rise, but the numbers don't lie—the Consumer Price Index has been bumped up to 4.2 percent, close to January's high of 4.3 percent. Since energy costs also affect multifamily buildings, one can assume that rent hikes will eventually follow energy hikes.



Interest Rates:
May saw both the Prime Rate and LIBOR continue downward to hit 16-month lows, while the 10-year Treasury rate, having hit bottom in March, continued to creep upward. Short-term rates will remain low as long as recession lingers as a threat in policymakers' minds, while longer-term rates are moving up as inflation fears creep into investors' minds.

However, low rates don't seem to be luring nearly enough buyers into the condo and single-family home market to turn things around. Once the public thinks the prices have hit bottom, would-be condo owners should come off the sidelines and buy, decreasing condo inventory.



Sources for Starts, Rent Changes, Interest Rates: National Association of Home Builders.

To comment, contact Keat Foong at kfoong@multi-housingnews.com.

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Market Report: Sunshine State?
While the Sunshine State continues to attract new residents and create some jobs, the multifamily market there is still dealing with the housing crisis fallout on a variety of fronts.

August Market Pulse
Commentary and Data Supplied by Dean Crist, Senior Economist, National Association of Home Builders (NAHB)

Capital Gains
Like the elected officials who come and go, Washington, D.C. is in a state of perpetual transition. It's a markedly different place today than it was just 10 years ago -- let alone in 1800, the year it became the nation's capital.

July Market Pulse
Commentary and Data Supplied by Bernard Markstein, Staff VP for Forecasting, National Association of Home Builders (NAHB)

Market Report: Bright Spots
Even though the weather in Seattle, Portland and the Bay Area is often marked by foggy, overcast skies, the multifamily forecast for these three areas remains sunny. In fact, San Francisco, San Jose, Seattle and Portland all made MHN's list of "10 Hot Prospects for 2008."

June Market Pulse
June Market Data

Big Apple Riding Out Recession
By Michael Russo, MHN Contributing Editor

May Market Pulse
Commentary and Data Supplied by Dean Crist, Senior Economist, National Association of Home Builders

Texas Capital Is Growing Fast
Employment growth and a strengthening economy are helping to reinforce an already solid Austin multifamily market. By the end of 2007, Austin added approximately 29,100 jobs and experienced an unemployment rate of 3.6 percent, the lowest in four years and well below the national average of 4.6 percent.

April Market Pulse
Commentary and Data Supplied by Dean Crist, Senior Economist, National Association of Home Builders

India Offers Growth Potential for Real Estate Investors
The two big emerging markets that now lead the news are China and India, but there are three key differences between these fast-developing economies that real estate investors need to understand.

March Market Pulse
Commentary and Data Supplied by Bernard Markstein, Director of Forecasting, National Association of Home Builders Economics

Starring Role for LA Rentals
Driven by the city's attractions and overall beauty, Los Angeles is renowned for its constant population growth and continuous influx of new residents. In fact, over the last few years, the market has added thousands of new residents and even greater gains are anticipated between 2008 and 2010. The LA market also experienced employment growth in 2007 (albeit slight), which has helped to maintain these current population increases. What continues to fuel the local Los Angeles apartment market is that a good portion of these new residents seek out rental units instead of purchasing the area's costly homes.

February Market Pulse
Commentary and Data Supplied by Robert Sheehan, Consulting Economist for the National Apartment Association

Southeast Steady Performers
Since Southeast cities like Charlotte, N.C.; Raleigh, N.C. and Nashville, Tenn. didn't really follow the condo boom, they're not likely to experience the same fall-off as cities that did, industry observers agree.

January Market Pulse
Commentary and Data Supplied by Robert Sheehan, Consulting Economist for the National Apartment Association

Apartment Market Positioned to Benefit from Housing Downturn, Demographic Shifts
A 2008 Apartment Forecast by Linwood Thompson, senior vice president and managing director of Marcus & Millichap’s National Multi Housing Group

10 Hot Prospects for 2008
The end of a year is a natural time to reflect on the previous 12 months and plan for the upcoming ones. As everyone knows all too well, 2007 has been a tumultuous year with the subprime mortgage meltdown and its fallout, which led to major Wall Street firms reporting more than $20 billion in write-downs for the third quarter. Third-quarter results were also weak for Fannie Mae and, especially, Freddie Mac.

December Market Pulse
Commentary and Data Supplied by Robert Sheehan, Consulting Economist for the National Apartment Association

Market Pulse: Interest Rates, Building Materials Prices
Market charts with commentary and data supplied by Robert Sheehan, Consulting Economist for the National Apartment Association.

Growth in Hot-lanta
Powerful demographic and economic forces continue to attract investors to Atlanta's multi-housing market. Atlanta led the nation in population growth by adding nearly 1 million people from 2000-2006. The metro population now tops 5.1 million residents and is expected to add 100,000 to 150,000 people per year in the years ahead. The city is also one of the national leaders in attracting college-educated 25- to 34-year olds. People come for the lifestyle and the jobs. The metro workforce added 200,000 jobs since the end of 2003 for total employment of 2.6 million. Home Depot, UPS and Coca-Cola are joined by 10 other firms that together place Atlanta as number three nationally for cities with the most Fortune 500 headquarters.

A Harvest in the Heartland
Despite the unrest in the financial markets over the last three months, real estate investors are still bullish on quality multi-housing projects with good fundamentals. While coastal metropolitan areas such as New York and San Francisco continue to be investor favorites, Midwest cities like Chicago and Minneapolis are experiencing multi-housing revitalizations. Smaller municipalities like Ann Arbor, Mich. and Indianapolis are also attracting more than their fair share of multi-housing work, with occupancy rates approaching 95 percent.

Boston Leads New England Development
New England combines historical traditions with academic pursuits, leavened by an interest in exploring new options. Its conservative nature manifests itself in the fact that much of the area's condominium development tends to be purchased by people who plan on living in the units, rather than absentee investors. This, observers agree, helped stabilize the market as it experienced the recent downturn shared by the rest of the U.S. and keeps most units from entering the "shadow" rental pool.