Rental Housing market economic update--October. (Industry Forecast & Update).It is becoming clearer that the terrorist attacks on Sept. 11, 2001, pushed the U.S. economy closer to recession. It is still our opinion that the economy entered the recession in the third quarter, and that it will probably last for three quarters. The recession should be relatively mild since the federal government will be priming the pump by increasing spending for defense, disaster recovery programs and support programs for the increased unemployment that accompanies the recession. Signs of moderation in the 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. housing market became more significant with the release of absorption absorption [Lat.,=sucking from], taking of molecules of one substance directly into another substance. It is contrasted with adsorption, in which the molecules adhere only to the surface of the second substance. data for the second quarter. Absorption rates of new rental apartment units declined in the second quarter. Rental Housing Market Absorption rates of new unfurnished unfurnished Adjective not containing any furniture Adj. 1. unfurnished - not equipped with what is needed especially furniture; "an unfurnished apartment" rental apartment units moderated in the second quarter. This occurred despite the fact that the level of completions declined. About 93,000 new unfurnished rental apartments were absorbed Absorbed 1. In a general business sense, when a cost is treated as an expense instead of being passed on to the customer in the form of higher prices. 2. In underwriting, when an issue has been completely sold to the public. 3. in the first half of this year, versus 106,000 units for the same period in 2000. Net effective rents in the Consumer Price Index (CPI (1) (Characters Per Inch) The measurement of the density of characters per inch on tape or paper. A printer's CPI button switches character pitch. (2) (Counts Per I ) data series declined in September September: see month. . This really had nothing to do with the terrorist attacks. It probably represented an adjustment in the data series from a sharp rise in August. Rent increases will moderate in a few months as a result of national economic recession. New apartment construction starts rose slightly in September. Apartment starts, however, are down 4 percent this year and will drop further during the recession. No major downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. , however, is still expected. Little overbuilding occurred in the growth portion of the current economic cycle. The Economy The U.S. Index of Leading Economic Indicators index of leading economic indicators An index that is compiled by the Conference Board, a private-sector consulting firm. The index is designed to indicate the future direction of economic activity. fell in September. The Index declined 0.5 percent in September, following a revised 0.1 percent drop in August. The two-month decline in the Index suggests weakness in the economy into next year. A positive factor for the economy was the sharp increase in personal income. Personal income rose at a 24 percent annual rate in August. This reflects the impact of the federal income tax rebate tax rebate n → devolución f de impuestos; reembolso fiscal tax rebate n → ristourne f d'impôt tax rebate and rate cut. Personal income will continue to benefit from the rebates through the late fall and help offset the negative impact of the recession. Labor Markets 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 The unemployment rate did not change in September, staying at a 4.9 percent rate. The rate did not rise because the unemployment rate comes from the household survey and it showed job growth, and the survey was conducted during the week of the terrorist attacks. The survey of employers did show a net loss of 199,000 jobs in September. There is little question that unemployment will increase in coming months. Inflation and Interest Rates Consumer prices showed an unexpected jump in September. They rose 5.9 percent in September after not changing in August. They rose last month as a result of higher oil and gas prices in the wake of the Sept. 11, 2001, terrorist attacks. These price increases have already been reversed. The core rate of inflation increased at only a 2.6 percent annual rate in September and continues to decelerate de·cel·er·ate v. de·cel·er·at·ed, de·cel·er·at·ing, de·cel·er·ates v.tr. 1. To decrease the velocity of. 2. . Interest rates fell further in September and are continuing to do so this month as a result of the weaker economy from the terrorist attacks. Short term interest rate are now down more than 335 basis points (100 basis points equal 1 percent) Housing Construction Remained Relatively Strong In September "Housing construction continued to remain relatively strong in September, in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the negative impact of the terrorist attack on the overall U.S. economy. Housing starts actually rose 1.7 percent in September. "The slowing in the economy from the terrorist attack, however, probably accounted for the 3 percent drop in building permit activity," said 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 People whose surname is or was Sheehan include:
An economist is an expert in the social science of economics.[1] for the National Apartment Association. He added, "Housing construction had not been fully immune from the slowing in the economy. Permit activity was moderating slightly since the late spring as the economy slowed and the September level of permit activity was the lowest since December December: see month. 1977." Total homing starts in September were at a 1.574 million unit seasonally adjusted Seasonally adjusted Mathematically adjusted by moderating a macroeconomic indicator (e.g., oil prices/imports) so that relative comparisons can be drawn from month to month all year. annual rate, versus a revised 1.548 million unit rate for August, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the U.S. Department of Commerce. A 1.268 million single family starts rate occurred in September, up a statistically 0.6 percent from the 1.260 million unit rate for August. Multifamily starts rose 6.3 percent to a 306,000 unit rate in September from the 288,000 unit rate for August. Starts of apartment units (in structures with five or more units) increased 2.7 percent to a 270,000 unit rate in September from a 263,000 unit rate a month earlier. Building permit activity occurred at a 1.524 million unit rate in September, versus the 1.571 million units rate for August. Single family permits fell 4.1 percent to a 1.160 million unit rate in September from 1.210 million a month earlier. Multifamily permits increased 0.8 percent to a 364,000 unit rate from 361,000 in August. Permits for apartment units increased 3.1 percent during September to a 299,000 unit rate from 290,000 in August. Housing starts were mixed regionally in September. They increased 12.5 percent in the West and 7.6 percent in the South. They declined 16.6 percent in the Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians and 11 percent in the Northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. .
CURRENT RENTAL HOUSING MARKET
Economic & Demographic Indicator
Unit of Measure
Rental Vacancy Rates
Apartments percent
All Rental Units percent
New Unfurnished Rental Apartments
Units Completed thousands
Absorption Rates
3 Months percent
6 Months percent
9 Months percent
12 Months percent
Median Rents-New Units $'s
Median Asking Rent -- All For Rent Units $'s
New Condominium/Cooperative Apartments
Units Completed thousands
Absorption Rates
3 Months percent
6 Months percent
9 Months percent
12 Months percent
Median Asking Price $'s
Total Households thousands
Rental Households thousands
% Total Households percent
Multifamily New Construction
Number of Units Started thousands (1)
Apartment Units Started thousands (1)
Value of Work Put-in-Place billions of $'s (1)
Rental Property Maintenance,
Repairs, & Improvements (2) millions of $'s
Price Indexes (3)
Consumer Prices 1982-84=100
Rents 1982-84=100
Producer Prices Finished Goods 1982=100
Materials & Components for Construction 1982=100
Gypsum Building Materials 1982=100
Cement 1982=100
Softwood Lumber 1982=100
Softwood Plywood 1982=100
Economic Activity
GDP billions of 1996 $'s
billions of current $'s
Per Capita Disposable Income current $'s
1996 Dollars
Index of Leading Economic Indicators 1992=100
Consumer Confidence Index 1985=100
Non-Farm Business Productivity (5) Annualized % growth
Manufacturing Productivity (5) Annualized % growth
Employment
Household Basis thousands
Establishment Basis thousands
Unemployment Rate percent
Construction Workers percent
Employment Cost Index Annualized % growth
Compensation Cost Index Construction Annualized % growth
Interest Rates
3 Month T Bills percent
1 Year Treasuries percent
10 Year Treasuries percent
30 Year Treasuries percent
Yield Curve percent
Year Previous
Ago Period
Rental Vacancy Rates
Apartments 9.4 9.3
All Rental Units 8.0 8.2
New Unfurnished Rental Apartments
Units Completed 58.3 65.9
Absorption Rates
3 Months 70.0 76.0
6 Months 89.0 90.0
9 Months 94.0 95.0
12 Months 97.0 98.0
Median Rents-New Units 791 840
Median Asking Rent -- All For Rent Units 464 478
New Condominium/Cooperative Apartments
Units Completed 9.2 9.6
Absorption Rates
3 Months 78.0 73.0
6 Months 76.0 92.0
9 Months 92.0 91.0
12 Months 96.0 98.0
Median Asking Price $112,200 $145,300
Total Households 105,312 106,807
Rental Households 34,538 34,663
% Total Households 32.8 32.5
Multifamily New Construction
Number of Units Started 303 363
Apartment Units Started 255 326
Value of Work Put-in-Place 26.9 31.1
Rental Property Maintenance,
Repairs, & Improvements (2) 9434 12477
Price Indexes (3)
Consumer Prices 172.8 177.5
Rents 202.7 209.7
Producer Prices Finished Goods 138.2 140.7
Materials & Components for Construction 150.4 151.0
Gypsum Building Materials 160.6 107.9
Cement 150.3 150.5
Softwood Lumber 174.4 175.1
Softwood Plywood 133.0 141.1
Economic Activity
GDP 9,229.4 9,334.5
9,857.6 10,141.7
Per Capita Disposable Income 25,608.0 26,583.0
23,774.0 24,205.0
Index of Leading Economic Indicators 109.8 109.9
Consumer Confidence Index 142.5 114.0
Non-Farm Business Productivity (5) 7.3 0.0
Manufacturing Productivity (5) 6.5 -3.6
Employment
Household Basis 134,939 135,379
Establishment Basis 131,963 132,497
Unemployment Rate 4.1 4.5
Construction Workers 6.4 6.8
Employment Cost Index 4.1 4.1
Compensation Cost Index Construction 4.6 5.3
Interest Rates
3 Month T Bills 6.09 3.51
1 Year Treasuries 6.18 3.62
10 Year Treasuries 5.80 5.24
30 Year Treasuries 5.83 5.61
Yield Curve -38.0 162.0
Current
Reporting
No. Period
Rental Vacancy Rates
Apartments 9.7 Q2 01
All Rental Units 8.3 Q2 01
New Unfurnished Rental Apartments
Units Completed 53.7 Q4 00
Absorption Rates
3 Months 65.0 Q1 01
6 Months 87.0 Q1 01
9 Months 95.0 Q1 01
12 Months 98.0 Q1 01
Median Rents-New Units 856 Q1 01
Median Asking Rent -- All For Rent Units 502 Q2 01
New Condominium/Cooperative Apartments
Units Completed 9.6 Q4 00
Absorption Rates
3 Months 79.0 Q1 01
6 Months 82.0 Q1 01
9 Months 95.0 Q1 01
12 Months 94.0 Q1 01
Median Asking Price $148,900 Q1 01
Total Households 106,736 June
Rental Households 34,513 Q2 01
% Total Households 32.3 Q2 01
Multifamily New Construction
Number of Units Started 280 Aug.
Apartment Units Started 252 Aug.
Value of Work Put-in-Place 31.2 July
Rental Property Maintenance,
Repairs, & Improvements (2) 9817 Q1 01
Price Indexes (3)
Consumer Prices 177.5 Aug.
Rents 210.8 Aug.
Producer Prices Finished Goods 141.1 Aug.
Materials & Components for Construction 151.0 Aug.
Gypsum Building Materials 112.0 Aug.
Cement 150.7 Aug.
Softwood Lumber 172.8 Aug.
Softwood Plywood 146.4 Aug.
Economic Activity
GDP 9338.4 Q2 01
10,201.6 Q2 01
Per Capita Disposable Income 27,023.0 July
24,621.0 July
Index of Leading Economic Indicators 109.6 Aug.
Consumer Confidence Index 97.6 Sept.
Non-Farm Business Productivity (5) 2.2 Q2 01
Manufacturing Productivity (5) 1.1 Q2 01
Employment
Household Basis 134,393 Aug.
Establishment Basis 132,383 Aug.
Unemployment Rate 4.9 Aug.
Construction Workers 7.5 Aug.
Employment Cost Index 3.9 Q2 01
Compensation Cost Index Construction 5.0 Q2 01
Interest Rates
3 Month T Bills 3.36 Aug.
1 Year Treasuries 3.47 Aug.
10 Year Treasuries 4.97 Aug.
30 Year Treasuries 5.48 Aug.
Yield Curve 150.0 Aug.
Current
Year Previous
Ago Period
Rental Vacancy Rates
Apartments 0.3 0.4
All Rental Units 0.3 0.1
New Unfurnished Rental Apartments
Units Completed -4.6 12.2
Absorption Rates
3 Months -5.0 -11.0
6 Months -2.0 -3.0
9 Months 1.0 0.0
12 Months 1.0 0.0
Median Rents-New Units 8.2% 1.9%
Median Asking Rent -- All For Rent Units 8.2% 5.0%
New Condominium/Cooperative Apartments
Units Completed 0.4 0.0
Absorption Rates
3 Months 1.0 6.0
6 Months 6.0 -10.0
9 Months 3.0 4.0
12 Months -2.0 -4.0
Median Asking Price 32.7% 2.5%
Total Households 1,424.0 -71.0
Rental Households -25.0 -150.0
% Total Households -0.5 -0.2
Multifamily New Construction
Number of Units Started -23.0 -83.0
Apartment Units Started -3.0 -74.0
Value of Work Put-in-Place 16.0% 0.3%
Rental Property Maintenance,
Repairs, & Improvements (2) 4.1% -21.3%
Price Indexes (3)
Consumer Prices 2.7% 0.0% (4)
Rents 4.0% 6.5% (4)
Producer Prices Finished Goods 2.1% 3.5% (4)
Materials & Components for Construction 0.4% 0.0% (4)
Gypsum Building Materials -30.3% 56.4% (4)
Cement 0.3% 1.6% (4)
Softwood Lumber -0.9% -14.7
Softwood Plywood 10.1% 55.7% (4)
Economic Activity
GDP 1.2 0.2% (4)
3.5 2.4% (4)
Per Capita Disposable Income 5.5 21.8% (4)
3.6 22.7% (4)
Index of Leading Economic Indicators -0.2 -0.3
Consumer Confidence Index -44.9 -16.4
Non-Farm Business Productivity (5) -5.1 2.2
Manufacturing Productivity (5) -5.4 4.7
Employment
Household Basis -546 -986
Establishment Basis 420 -114
Unemployment Rate 0.8 0.4
Construction Workers 1.1 0.7
Employment Cost Index -0.2 -0.2
Compensation Cost Index Construction 0.4 -0.3
Interest Rates
3 Month T Bills -273 bp -15 bp
1 Year Treasuries 271 bp -15 bp
10 Year Treasuries -83 bp -27 bp
30 Year Treasuries -35 bp -13 bp
Yield Curve
HOUSING CONSTRUCTION ACTIVITY
(units in thousands)
Housing Starts
(Seasonally Adjusted Annual Rates)
Aug. Sept. Change Aug. to Sept.
Month 2001 2001 No. %
Total 1,548 1,574 26 1.7%
Single Family 1,260 1,268 8 0.6%
Multifamily 288 306 18 6.3%
2 to 4 units 25 36 11 44.0%
5 or more units 263 270 7 2.7%
Northeast 154 137 -17 -11.0%
Midwest 338 282 -56 -16.6%
South 680 732 52 7.6%
West 376 423 47 12.5%
Aug. Sept. Change 2000-2001
Month 2001 2001 No. %
Total 1,211.3 1,234.3 23.0 1.9%
Single Family 955.7 987.3 31.6 3.3%
Multifamily 255.6 247.0 -8.6 -3.4%
2 to 4 units 28.5 27.7 -0.8 -2.8%
5 or more units 227.1 219.3 -7.8 -3.4%
Northeast 113.5 110.7 -2.8 -2.5%
Midwest 247.5 247.5 0.0 0.0%
South 554.0 566.8 12.8 2.3%
West 296.2 309.3 13.1 4.4%
Building Permits
(Seasonally Adjusted Annual Rates)
Aug. Sept. Change Aug. to Sept.
Month 2001 2001 No. %
Total 1,571 1,524 -47 -3.0%
Single Family 1,210 1,160 -50 -4.1%
Multifamily 361 364 3 0.8%
2 to 4 units 71 65 -6 -8.5%
5 or more units 290 299 9 3.1%
Northeast 152 141 -11 -7.2%
Midwest 308 307 -1 -0.3%
South 701 680 -21 -3.0%
West 410 396 -14 -3.4%
Aug. Sept. Change 2000-2001
Month 2001 2001 No. %
Total 1,220.3 1,242.2 21.9 1.8%
Single Family 924.3 949.3 25.0 2.7%
Multifamily 296.0 292.9 -3.1 -1.0%
2 to 4 units 47.3 51.4 4.1 8.7%
5 or more units 248.7 241.5 -7.2 -2.9%
Northeast 125.4 116.2 -9.2 -7.3%
Midwest 248.6 248.1 -0.5 -0.2%
South 540.4 556.8 16.4 3.0%
West 306.0 321.0 15.0 4.9%
Units Completed
(Seasonally Adjusted Annual Rates)
Aug. Sept. Change Aug. to Sept.
2001 2001 No. %
1,609 1,522 -87 -5.4%
1,265 1,228 -37 -2.9%
344 294 -50 -14.5%
30 32 2 6.7%
314 262 -52 -16
139 127 -12 -8.6%
305 300 -5 -1.6%
763 725 -38 -5.0%
402 370 -32 -8.0%
Aug. Sept. Change 2000-2001
2001 2001 No. %
1,157.5 1,124.4 -33.1 -2.9%
906.3 887.0 -19.3 -2.1%
251.2 237.4 -13.8 -5.5%
19.5 25.2 5.7 29.2%
231.7 212.2 -19.5 -8.4%
108.9 100.9 -8.0 -7.3%
246.4 224.3 -22.1 -9.0%
534.8 527.1 -7.7 -1.4%
267.4 272.2 4.8 1.8%
Units Under Construction
at End of Period
(Seasonally Adjusted Annual Rates)
Aug. Sept. Change Aug. to Sept.
2001 2001 No. %
1,004 1,009 5 0.5%
687 689 2 0.3%
317 320 3 0.9%
29 29 0 0.0%
288 291 3 1.0%
116 117 1 0.9%
200 198 -2 -1.0%
423 424 1 0.2%
265 270 5 1.9%
Robert J. Sheehan is President of Regis (REmote Graphics InStruction) A graphics language from Digital used on graphics terminals and first introduced on the PDP-11. J. Sheehan Data and Forecasting Service in McLean McLean, city (1990 pop. 38,168), Fairfax co., N Va., a suburb of Washington, D.C. Manufacturing includes foods, satellite components, and computer and telecommunications equipment. , Va., and serves as NAA's Consulting Economist. He can be reached at 703/893-9185 or by e-mail at gdad@erols.com. |
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