Friday, December 23, 2011

GlobeSt.com - Multifamily Quarterly: Virtually Unstoppable - Daily News Article

Less than a decade ago, the American Dream was home ownership. Then came the subprime collapse, followed by the Great Recession and, subsequently, plunging home values and tightened credit standards. Three years after the great credit freeze of 2008, single-family home ownership has sunk to between 64% and 66%, and the American Dream has turned into a nightmare for many.

Enter multifamily. During 2011, the abundance of interested buyers of multifamily product was outmatched only by the abundance of renters. Peter Muoio, principal with Apartment Realty Advisors’ ARA Research in New York City, tells it by the numbers. Vacancies in 2011 dropped 200 basis points year-over-year, while effective rents ended up well above pre-recession levels. Along those lines, homeownership has declined approximately 200 basis points, and according to Muoio, every 100-basis-point change in the ownership rate accounts for “about 1.2 million households that are shifting where they’re living.”

Bank of America Merrill Lynch’s October 2011 report demonstrated similar positive numbers, noting that revenues per available unit were up 6.3% year-over-year in the top 20 metropolitan US markets. The report also pointed out that October occupancy had increased 60 bps over the year, as had effective rental rates, which were up 5.6%.

Read more...GlobeSt.com - Multifamily Quarterly: Virtually Unstoppable - Daily News Article

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