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Up, down and in between.

TRENDLINES FOR OCCUPANCY and development among key markets nationwide follow:

UP: Downtown Indianapolis' occupancy is at its highest level since the mid-1990s. Its vacancy rate dropped by 50 percent in 2007, and it could drop again this year. Only 4.2 percent of the more than 3,300 apartments in downtown Indianapolis were vacant last year. The surge in foreclosures has turned more homeowners into apartment renters.


Additionally, growth at Indiana University-Purdue University Indianapolis is attracting more students who need units close to campus. With soaring gas prices, people are seeking to live closer to work.

Source: Tikijian Associates Multihousing Investments Advisors

DOWN: As house prices in America continue their descent, market watchers are having to cast back ever further for gloomy comparisons. A recent S&P/Case-Shiller national house-price index, published in late May, showed a slump of 14.1 percent in the year to the first quarter, the worst since the index began 20 years ago. Yale University economist Robert Shiller, co-inventor of the index, has compiled a version that stretches back over a century. This shows that the latest fall in nominal prices is already much bigger than the 10.5 percent drop in 1932, the worst point of the Depression.

Source: The Economist

IN BETWEEN: Cap rates rose 6 bps in April and average prices fell below $100,000 per unit. Some variation in pricing may just reflect the thin market and a change in the quality or composition of the assets that are trading. Though most bids are coming in well shy of asking prices, the transactions that are selling have yet to reflect a significant price correction. The Moody's/REAL Commercial Property Price Index gained in Q1 2008 and some participants are reporting cap rates on the best assets may be lower this year. Nationally, prices are off 3.4 percent from their peak, but are holding up in the top 10 markets where prices are down less than 2.4 percent.

Source: Real Capital Analytics
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Title Annotation:Management Insider: News, Up, Down and in Between
Date:Jul 1, 2008
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