Multifamily sector boosts the economy in 2011

Apartment market funds were elevated in 2011.

Both multifamily properties and tenants aided the economic landscape during 2011, which helped improve job levels and other aspects of the economy. This also added to the total level of units in the national multifamily pipeline.

The sector contributed more than $1 trillion to the national economy during the year, a report completed jointly between the National Apartment Association and the National Multi Housing Council explained. Total contributions for the year factored to approximately $3 billion per day. The significant amount of money likely helped both the economy and property management companies throughout the country.

Construction improves, but still well below peak levels
Nearly $15 billion was used for construction spending during the year, despite the completion of only 130,000 new units during the year, the report noted. This was one of the lowest levels ever recorded, as the average before the recession was close to 270,000 units per year.

“Even in one of the worst economic climates we’ve ever seen, the multifamily industry and its 35 million residents contributed more than $1 trillion to the economy,” said Thomas Bozzuto, CEO of the Bozzuto Group. “With up to seven million new renter households forming this decade – almost half of all new households – the dollars and jobs we add to the economy will only grow in magnitude.”

Renters also made a splash during 2011. There was nearly $422 billion spent on various services and goods during the year, with close to three-quarters used for local economic purposes, according to the report. This helped the economy receive a boost of more than $885 billion, which aided the sustainability of nearly 23 million jobs.

Operations costs for apartments also showed impressive figures, as close to $68 billion was spent on renovations to more than 19 million apartments, the report added. This helped contribute nearly $183 billion to the economy, as well as help more than 2 million jobs.

Rental vacancies fall in Q4
Continued improvements throughout the multifamily market likely helped commercial property managers strengthen occupancy rates at their properties.

During the final three months of 2012, there was a vacancy rate of 8.7 percent for rental properties, a report from the Department of Commerce noted. This was 0.7 percent lower than the level recorded one year earlier, while it was approximately the same as the previous quarter’s figure.

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