RENTAL MARKET IMPROVES, CONDO MARKET STILL STRONG

With consumer demand for apartments on the upswing, multifamily developers across the country are optimistic that the rental market is finally in the midst of a recovery, according to the latest results from the Multi-family Market Index (MMI), released by National Association of Home Builders (NAHB).

All classes of apartments showed improvement in demand, with Class B apartments showing an index value of 50.6, a 7-point rise compared to the same period last year. Luxury Class A units also rebounded with an index value of 49.2, a 10-point improvement since the second quarter of 2003. Lower-rent units, a category with a generally higher demand than the other two, continued to do so with an index value of 55.3, an increase of 10 points over last year's second quarter, according to the report.

The current MMI also found that the market for condos remains strong, with the index gauging supply reaching 58.9, a figure that represents a 5-point improvement over 12 months ago. Although survey respondents said they expect the condo market to remain healthy, they expect it to cool somewhat in the next six months.

From September 15, 2004 C.A.R. Newsline

Reprinted with permission of the CALIFORNIA ASSOCIATION OF REALTORS®

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