We haven’t done this in a while
Increased demand for rental housing has led to a considerable uptick in multifamily construction, finds the National Multi Housing Council’s (NMHC) latest Quarterly Survey of Apartment Market Conditions.
The pace of development activity has increased in most markets. Two-thirds (67%) of respondents noted considerable activity, either in the planning stage or actual new construction. In particular, 20% said developers are breaking [ground] on new projects at a rapid clip. The other 47% reported an increase in pre-construction activities—acquiring land, lining up financing, getting building permits—but not much actual construction yet.
Even with this increased activity, more than half (54%) think new development remains considerably below demand.
Equity Residential (EQR: 57.01 +1.12%) earned a net income of about $113 million for the third quarter, up from $29.8 million last year due in part to an increased demand for apartments, the company announced Wednesday.
The Chicago-based real estate trust also reported a net income of 35 cents per share for the quarter.
The number of tenant households rose 4% in the year ending June 2011, according to the Census Bureau.
"Fundamentals continue to be positive and we remain confident that increasing demand for apartment living combined with limited new supply will produce strong results next year and for years to come despite concerns about weakening economic growth," company president and CEO David J. Neithercut said in the release.
From the WSJ
While concerns about the economy are cooling the market for most other types of commercial real estate, apartment rents and occupancies continue to be boosted by demand from millions of people who are victims of foreclosure or are unwilling or unable to buy their own homes.
At the end of the third quarter, 5.6% of the nation’s apartments were vacant, down from 5.9% in the second quarter, and the lowest level since 2006, according to Reis Inc., a real-estate data service.
Rents are up even in some cities that have been hard hit by high unemployment and the housing crash, like Orlando, Fla., Detroit and Phoenix.