Condos Are King in Third Quarter

WASHINGTON, DC-The year has yielded a mixed bag for the multifamily market, and the National Association of Home Builders has put the evidence down in black and white in its most recent Multifamily Market Index report. As of the end of the third quarter, condominium properties have proven to be hot investments, but apartment communities have not fared so well.

The MMI for condominium unit starts, increasing .03 points to 53.47 from the second quarter, shows that the demand for condominiums outweighed the supply, as has been the case since the start of 2003. However, low interest rates for homebuyers and ramifications of a week economy took a toll on the apartment market. The MMI on effective rents saw a 6.24-point decrease from the last quarter to 41.73. But the future for the apartment market is not so grim, the study concluded.

“Long-term interest rates have begun to rise, which may cool the red-hot housing sector in the near future,” Delta Associates’ Third Quarter 2003 Apartment and Condominium Report attests. And NAHB chief economist David Seiders notes,”an improving economy should set the stage for greater strength in this sector down the road.”