Multifamily sector continues upward progress in early 2013

Apartment conditions improved during the early part of the year.

Commercial property managers in charge of multifamily properties experienced an amelioration in sector conditions during the early part of this year, as many facets showed significant gains from last year.

All four readings on the National Multi Housing Council's April Quarterly Survey of Apartment Market Conditions showed improvement, as they all either remained or rose above 50. This determines that there was growth in these measurements compared to the previous period.

The Market Tightness reading jumped nine points to an index of 54, according to the report, which helped it not only get back to positive territory after the first quarter, but it also was higher than 50 for 12 of the last 13 quarters.

While Sales Volume did not increase as significantly, the figure improved to 55 after the first quarter from the previous periods' 49, the repot explained. The Debt Financing measurement also saw an improvement, as it rose to 59.

Equity Financing did not change during the quarter, but it managed to say at 56, the report noted. This helped conditions remain positive, and as the seventh straight quarter where conditions did not worsen.

"The apartment industry is operating on cruise control, as the expansion continues unabated," said Mark Obrinsky, vice president for research and chief economist. "While concern about overbuilding has begun to crop up, demand for apartment residences remains strong. New construction may have finally recovered fully, but most units under construction won't be delivered until 2014 or later. The dearth of recent completions has contributed to relatively low product availability. As deliveries increase, we expect to see an even greater pick-up in sales volume."

Multifamily housing starts skyrocket in March
As growth is notable throughout many categories in the market, the multifamily situation may see another jump in inventory in the coming months. The total rate of construction for multifamily properties with five units or more increased to 392,000 last month, according to a report from the Department of Commerce. This was nearly a 30 percent improvement from the previous month's figure.

There also was a notable improvement in the number of completed apartment construction projects with five or more units. The report added that this figure reached a rate of 202,000 in March. This figure was close to 50 percent improved from one year earlier, while month-over-month statistics were also nearly the same.

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