In an article in the Philadelphia Inquirer, they wrote that construction of multifamily housing units, primarily rental apartments has seen an increase in 23.5 percent, the largest increase in over 19 months. Permits, not starts, are the factor economists take to heart, because they are much better measured, are less affected by weather, and are forward-looking.
Multifamily permits are at their highest level since October 2008. Rents are rising, vacancy rates are falling, and the economy continues to create enough jobs to sustain a modest recovery.
Strength in the multifamily market comes from an inability for some to buy homes, so more people are renting. Another factor is the changing demographics, with many baby boomers now looking for condos.
In the Philadelphia region, “a relatively strong recovery in apartment performance continues to unfold,” said analysts with real estate investment-services firm Marcus & Millichap. Although only 100 new rental units will have been brought to the market by the end of 2011, projects totaling 1,100 units will be completed in 2012, the analysts said.
The number of multifamily permits issued in the region spiked in this year’s second quarter to one of the highest levels in two years.
The Campbell-Inside Mortgage Finance survey said the average November price for a short sale – in which the lender agrees to take less than is owed on the mortgage – was $209,200. Move-in-ready bank repossessions sold for an average $189,700, the survey said, while neglected and/or damaged homes went for an average $98,600.
Home-buying sentiment remains high, yet sellers still struggle with accepting lower-than-expected prices. Some sellers might be tied to past market values or owe too much on their houses to accept less.
Many economists anticipate continuing price declines. More than 100 polled by Zillow, the real estate search engine, maintain that the nation is “working through a bottoming-out process,” said the company’s chief economist, Stan Humphries.
Those polled said they expected prices to drop 1.57 percent in the fourth quarter and to continue to decline until the market’s bottom is reached in late 2012 or early 2013.
After 2013: A steady annual appreciation rate of 3 percent through 2016, they said.