First Quarter of 2012 Shows Multifamily Market Improving

June 10, 2012

The National Association of Home Builders (NAHB) released the Multifamily Production Index (MPI) on Thursday. And guess what Chicago? The results of the index offers good news!

Collage of ApartmentsThe MPI, which measures builder and developer sentiment about current conditions in the multifamily market on a scale of 0 to 100, rose from 49 in the fourth quarter to 51 in the first quarter. This is the seventh consecutive quarter that the index has increased and the highest reading since the third quarter of 2005.

The MPI focuses on three factors of the multifamily housing market:

  1. Construction of low-rent units (dipped slightly to 53).
  2. Market-rate rental units (all-time high of 69).
  3. “For-sale” units, or condominiums (increased to 37, which is the highest reading since the fourth quarter of 2005).

Any number over 50 on the scale indicates that more respondents view conditions as improving as opposed to getting worse.

“In spite of continuing difficulties in the capital markets, it appears that new construction is underway,” said W. Dean Henry, chairman of NAHB’s Multifamily Leadership Board. “This is certain to help satisfy some of the pent up demand that has occurred over the past several years.”.

The Multifamily Vacancy Index (MVI) dropped to a level of 31, the lowest recording since the index’s inception in 2003. The MVI measures the multifamily housing industry’s perception of vacancies. The lower the number, the fewer the vacancies.

“Multifamily construction continues to be a bright spot in the overall housing market,” said NAHB Chief Economist David Crowe. “However, as indicated by the MVI, demand for apartments is now quite high, and production is still very low in a historic context and in the context of what we project is necessary to meet long-term demand.”

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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