Apartment Construction to Moderate As Economic Growth Slows.Apartment construction starts are expected to moderate slightly over the next two years. This forecast calls for apartment starts to total 307,000 units this year and 284,000 units in 2001. They totaled an estimated 312,000 units last year, up three percent from 1998. Expected slower economic growth this year and a flat 2001 should produce the declines in apartment starts. Rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. apartment market conditions continue to be buoyed by the very active economy, a tight labor market labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience , and stronger growth in personal incomes. Construction of rental apartments rose for the sixth straight year in 1999. The estimated 266,000 units started last year represented a two percent increase over 1998, and were up 166 percent from the recent 1993 low of 100,000 units. Starts of rental apartment properties should drop two percent to 262,000 units this year, and then decline eight percent more in 2001 to 242,000 units as the economy cools from tighter monetary policies that have produced higher interest rates. The U.S. Department of Commerce recorded an 8.7 percent rental apartment vacancy VACANCY. A place which is empty. The term is principally applied to cases where an office is not filled. 2. By the constitution of the United States, the president has the power to fill up vacancies that may happen during the recess of the senate. rate in the third quarter of last year. This is the lowest level since the 8.5 percent rate for the second quarter of 1990. This occurred despite the setting of another record in the home ownership rate of 67 percent of all households in the third quarter. Strong household growth from the strong economy produced an offset to the increase in the home ownership rate. More important is the special tabulation tab·u·late tr.v. tab·u·lat·ed, tab·u·lat·ing, tab·u·lates 1. To arrange in tabular form; condense and list. 2. To cut or form with a plane surface. adj. Having a plane surface. of Commerce Department data by Jack Goodman Jack Goodman is a Republican member of the Missouri Senate, representing the 29th District since 2005. He is currently the Assistant Majority Floor Leader. Previously he was a member of the Missouri House of Representatives from 2003 through 2004. of the National Multi Housing Council (NMHC NMHC National Multi Housing Council NMHC Non-Methane Hydrocarbons NMHC National Modular Housing Council ). His tabulations show growth in households in rental apartments rising faster than the overall increase in total renter households. He pointed out that much of the increase in the home ownership rate is coming from the rental housing stock in structures with less than five units. The rental apartment vacancy rate is expected to drop slightly more this year. Increases in rental apartment vacancy rates tend to occur with a lag to slowing in the economy. A small upturn in the rental apartment vacancy rate should happen in 2001 as the economy slows further. Last year, rent increases for all rental units moderated to an estimated average of about 2.6 percent, from 3.2 percent in 1998. This analysis now uses December December: see month. to December comparisons of the inflation measures to take better advantage of more trends than are often observed ob·serve v. ob·served, ob·serv·ing, ob·serves v.tr. 1. To be or become aware of, especially through careful and directed attention; notice. 2. in comparisons of annual averages. Increases in rents last year matched consumer price inflation. This is the first time since 1993 that their rate of increase did not exceed consumer price inflation. Weakness in the sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz  a·ble·ness n. one- to four-unit structures segment of the rental market
may account for the lower rate of increase in the rent index. Increases
in rents should be higher this year as overall inflation rises slightly
this year. Multifamily rental construction should soften in most regions
of the country over the next two years. We expect that rental apartment
construction should rise in the West as the California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). rental markets
recover further.
Condominium condominium In modern property law, individual ownership of one dwelling unit within a multidwelling building. Unit owners have undivided ownership interest in the land and those portions of the building shared in common. and cooperative cooperative Organization owned by and operated for the benefit of those using its services. Cooperatives have been successful in such fields as the processing and marketing of farm products and the purchasing of other kinds of equipment and raw materials, and in the apartment construction did strengthen last year, but should moderate over the forecast period. An estimated 48,000 condo/ co-op units were started in 1999, up seven percent from the 43,000 units level in reported for 1998. Our forecast calls for multifamily condo/co-op apartment starts to drop to 45,000 units this year and 42,000 units next year. Some of the increase in condo/co-op apartment market in 1999 may be attributed to the changes in the treatment of capital gains in the sale of primary residences passed in 1997 by Congress. More empty nesters empty nester n. Informal A parent whose children have grown and left home. Noun 1. empty nester - a parent whose children have grown up and left home may be turning to this form of housing because they are able to trade down from a detached de·tached adj. 1. Separated; disconnected. 2. Standing apart from others; separate. unit without facing capital gains taxes. Higher mortgage interest rates and a softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. economy could produce lower demand over the forecast period. Demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. are also playing a role in the condo/co-op market. Many condo/co-op households are first-time buyers first-time buyer n → persona que compra su primera vivienda first-time buyer n → personne achetant une maison ou un appartement pour la première fois first-time buyer or empty nesters. There are fewer young households in the Baby Bust baby bust n. A sudden decline in the birthrate, especially the one in the United States from about 1961 to 1981. ba generation from the late 1920s through most of the Great Depression. The trade-down market for condo/co-op units from empty nesters and young retirees is being impacted by another Baby Bust generation. Apartment Housing Starts and Selected Rental Housing Market Related Variables Forecast housing starts in thousands
1990 1991 1992
United States
Total Apartments 260.0 137.0 140.0
% Change -47.3% 2.2%
Rental 216.0 107.0 109.0
% Change -50.5% 1.9%
Condo/Co-op 44.0 30.0 31.0
% Change -31.8% 3.3% 6.5%
Northeast
Total Apartments 21.0 8.0 11.0
% Change -61.9% 37.5% -27.3%
Rental 15.0 6.0 8.0
% Change -60.0% 33.3% -37.5%
Condo/Co-op 6.0 2.0 3.0
% Change -66.7% 50.0% 0.0%
Midwest
Total Apartments 50.0 31.0 43.0
% Change -38.0% 38.7% -14.0%
Rental 45.0 28.0 38.0
% Change -37.8% 35.7% -18.4%
Condo/Co-op 5.0 3.0 5.0
% Change -40.0% 66.7% 20.0%
South
Total Apartments 99.0 51.0 50.0
% Change -48.5% -2.0% 10.0%
Rental 83.0 40.0 37.0
% Change -51.8% -7.5% 10.8%
Condo/Co-op 16.0 11.0 13.0
% Change -31.3% 18.2% 7.7%
West
Total Apartments 90.0 47.0 36.0
% Change -47.8% -23.4% -8.3%
Rental 73.0 33.0 26.0
% Change -54.8% -21.2% -11.5%
Condo/Co-op 17.0 14.0 10.0
% Change -17.6% -28.6% 0.0%
Median Rent New Units $600 $614 $590
Rental Apartment
Vacancy Rates 4Q99. 9.5% 10.2% 9.7%
% Change CPI(1) 5.4% 4.2% 3.1%
% Change CPI Rent Index(1) 4.2% 3.5% 2.7%
Unfurnished
Nonsubsidized
Units Completed(2) 214,300 165,300 110,300
Absorption Rates
New Units in %(*)
3 months 67% 70% 74%
6 months 85% 87% 91%
9 months 85% 87% 96%
12 months 96% 97% 98%
Renters Share of Total
Households 4Q
Each Year 35.9% 35.8% 35.6%
1993 1994 1995
United States
Total Apartments 133.0 223.0 245.0
% Change -5.0% 67.7% 9.9%
Rental 100.0 183.0 208.0
% Change -8.3% 83.0% 13.7%
Condo/Co-op 33.0 40.0 37.0
% Change 21.2% -7.5% 18.9%
Northeast
Total Apartments 8.0 12.0 12.0
% Change 50.0% 0.0% 25.0%
Rental 5.0 8.0 8.0
% Change 60.0% 0.0% 0.0%
Condo/Co-op 3.0 4.0 4.0
% Change 33.3% 0.0% 75.0%
Midwest
Total Apartments 37.0 50.0 46.0
% Change 35.1% -8.0% 13.0%
Rental 31.0 41.0 39.0
% Change 32.3% -4.9% 20.5%
Condo/Co-op 6.0 9.0 7.0
% Change 50.0% -22.2% -28.6%
South
Total Apartments 55.0 107.0 120.0
% Change 94.5% 12.1% 4.2%
Rental 41.0 93.0 106.0
% Change 126.8% 14.0% 0.9%
Condo/Co-op 14.0 14.0 14.0
% Change 0.0% 0.0% 28.6%
West
Total Apartments 33.0 54.0 67.0
% Change 63.6% 24.1% 17.9%
Rental 23.0 41.0 55.0
% Change 78.3% 34.1% 18.2%
Condo/Co-op 10.0 13.0 12.0
% Change 30.0% -7.7% 16.7%
Median Rent New Units $573 $576 $655
Rental Apartment
Vacancy Rates 4Q99. 9.5% 9.4% 9.6%
% Change CPI(1) 3.0% 2.7% 2.5%
% Change CPI Rent Index(1) 2.3% 3.1% 3.5%
Unfurnished
Nonsubsidized
Units Completed(2) 77,500 104,000 155,000
Absorption Rates
New Units in %(*)
3 months 75% 80% 74%
6 months 88% 93% 89%
9 months 87% 97% 97%
12 months 99% 98% 98%
Renters Share of Total
Households 4Q
Each Year 35.8% 35.8% 34.9%
1996 1997 1998
United States
Total Apartments 315.0 296.0 304.0
% Change 28.6% 6.0% 2.7%
Rental 227.0 254.0 261.0
% Change 9.1% 11.9% 2.8%
Condo/Co-op 44.0 42.0 43.0
% Change -4.5% 2.4% 7.0%
Northeast
Total Apartments 15.0 21.0 21.0
% Change 40.0% 0.0% 14.3%
Rental 8.0 15.0 18.0
% Change 87.5% 20.0% 5.6%
Condo/Co-op 7.0 6.0 3.0
% Change -14.3% -50.0% 66.7%
Midwest
Total Apartments 52.0 48.0 45.0
% Change -7.7% -6.3% 8.9%
Rental 47.0 43.0 38.0
% Change -8.5% -11.6% 7.9%
Condo/Co-op 5.0 5.0 7.0
% Change 0.0% 40.0% 14.3%
South
Total Apartments 125.0 151.0 155.0
% Change 20.8% 2.6% 5.2%
Rental 107.0 133.0 134.0
% Change 24.3% 0.8% 5.2%
Condo/Co-op 18.0 18.0 21.0
% Change 0.0% 16.7% 4.8%
West
Total Apartments 79.0 76.0 83.0
% Change -3.8% 9.2% -8.4%
Rental 65.0 63.0 71.0
% Change -3.1% 12.7% -8.5%
Condo/Co-op 14.0 13.0 12.0
% Change -7.1% -7.7% -8.3%
Median Rent New Units $672 $724 $745
Rental Apartment
Vacancy Rates 4Q99. 9.6% 9.0% 8.9%
% Change CPI(1) 2.7% 2.2% 1.6%
% Change CPI Rent Index(1) 2.9% 3.3% 3.3%
Unfurnished
Nonsubsidized
Units Completed(2) 191,500 189,700 214,500
Absorption Rates
New Units in %(*)
3 months 72% 72% 72%
6 months 85% 88% 83%
9 months 96% 95% 95%
12 months 97% 98% 96%
Renters Share of Total
Households 4Q
Each Year 34.6% 34.3% 33.6%
1999 2000 2001
United States
Total Apartments 312.0 307.0 284.0
% Change 2.6% -1.6% -7.5%
Rental 266.0 262.0 242.0
% Change 1.9% -1.5% -7.6%
Condo/Co-op 46.0 45.0 42.0
% Change -2.2% -6.7%
Northeast
Total Apartments 24.0 23.0 20.0
% Change -4.2% -13.0%
Rental 19.0 18.0 15.0
% Change -5.3% -16.7%
Condo/Co-op 5.0 5.0 5.0
% Change 0.0% 0.0%
Midwest
Total Apartments 49.0 47.0 43.0
% Change -4.1% -8.5%
Rental 41.0 40.0 36.0
% Change -2.4% -10.0%
Condo/Co-op 8.0 7.0 7.0
% Change -12.5% 0.0%
South
Total Apartments 163.0 157.0 143.0
% Change -3.7% -8.9%
Rental 141.0 136.0 124.0
% Change -3.5% -8.8%
Condo/Co-op 22.0 21.0 19.0
% Change -4.5% -9.5%
West
Total Apartments 76.0 80.0 78.0
% Change 5.3% -2.5%
Rental 65.0 68.0 67.0
% Change 4.6% -1.5%
Condo/Co-op 11.0 12.0 11.0
% Change 9.1% -8.3%
Median Rent New Units $766 $787 $805
Rental Apartment
Vacancy Rates 4Q99. 8.6% 8.4% 8.6%
% Change CPI(1) 2.6% 3.0% 2.9%
% Change CPI Rent Index(1) 2.6% 3.0% 2.8%
Unfurnished
Nonsubsidized
Units Completed(2) 218,600 215,400 208,300
Absorption Rates
New Units in %(*)
3 months 72% 73% 72%
6 months 82% 84% 83%
9 months 95% 94% 95%
12 months 96% 96% 97%
Renters Share of Total
Households 4Q
Each Year 33.0% 32.9% 32.8%
(1.) December to December (2.) for units completed previous year Source: U.S. Departments of Commerce and Labor, Forecasts by Regis (REmote Graphics InStruction) A graphics language from Digital used on graphics terminals and first introduced on the PDP-11. J Sheehan People whose surname is or was Sheehan include:
Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. J. Sheehan is president of Regis J. Sheehan Data and Forecasting Service in McLean, Virginia McLean is an unincorporated community located in Fairfax County in Northern Virginia. A small geographic area along Chain Bridge Road in Arlington County has a 22101 zip code and is also part of McLean. , and serves as NAA's consulting economist This article is about the profession. For the news publication, see The Economist. An economist is an expert in the social science of economics.[1] . Robert J. Sheehan is president of Regis J. Sheehan Data and Forecasting Service in McLean, Virginia, and serves as NAA's consulting economist. |
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