Apartments Still In Recovery, But Pace Will Slow: Marcus & Millichap via GlobeSt.com

Last year at this time, Marcus & Millichap researchers stated that although the economy was not at risk for a double dip, the US would see “a very volatile and choppy recovery.” Twelve months later, nothing much has changed, although the pace of the multifamily recovery is slowing a bit, said Hessam Nadji, the firm’s managing director of research and advisory services, in a webcast yesterday.

The US economy is facing significant headwinds, said Nadji, including a decline in confidence due to the US credit downgrade and the deadlock over the debt ceiling and other issues, as well as the geopolitical and economic crises in the Eurozone. There are also concerns over rising oil prices; high unemployment (8.2% today vs. 5% in 2007); a high unemployment rate at 14.5%; low consumer confidence; and decline in single-family home sales and prices.

“While these headwinds are long-term in nature, we cannot ignore some of the positive aspects that are evidence of a strengthening economy,” said Nadji. These include job growth in the private sector, rising worker productivity, growing corporate profits, a rise in exports, rising GDP, low Treasury rate (the 10-year is at 1.93%); and retail sales’ rising 10% above their pre-recession peak.

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