STAT TO WATCH
More Absorbent: Absorptions finally go positive in Q1. Another indicator of a light at the end of the rental-market tunnel: For the first time since 2001, apartment absorptions were positive in the first quarter of the year. (In 2004, nearly 18,000 apartments opened up during that same time frame.)
According to Reis, nationwide multifamily absorptions increased to 8,627 units in the first quarter of 2005. That means absorptions have totaled nearly 80,000 in the past 12 months. That’s the highest such figure in three and a half years, notes the National Multi Housing Council.
Jesse Glasgold, an analyst with Reis in New York, says he is also seeing decreasing vacancy rates and increasing rent costs moving in parallel with the positive absorptions. David Woodward, CEO and managing partner of Chicago-based Laramar Group, observed that his firm has started “to see occupancy tighten up and concessions burn off in some markets, but it’s very, very gradual.”
It’s speculative, though, to correlate these positive apartment absorption numbers with any potential anxiety about buying real estate in a so-called housing bubble, says Richard Levy, a research analyst at NMHC. “People may make [rent versus buy] decisions based on group effects,” he says, “but there are also more tangible things that are more quantifiable, like [attractive] interest rates.”
Interestingly, for the trailing four quarters, the number of multifamily completions decreased, to fewer than 88,000. It’s the first time in four years that completions and absorptions have achieved that kind of parity.
–Amy Rogers Nazarov