Multifamily fares well in weak economy
Activity in the multifamily subsector of the residential construction market remained reasonably healthy during 2001. This year shouldn't be bad either, with total starts nearly the same and spending faring much better than for either the commercial or industrial subsectors of the nonresidential construction market.
Based on trends through the first 10 months of last year, approximately 333,000 new multifamily housing units were started during 2001, about 5,000, or 1.5 percent, fewer than in the prior year. But the average value of these apartment, condominium and co-op multifamily units continued to increase. Between 2000 and 2001, the dollar value of multifamily construction work expanded by an estimated 7.7 percent, before adjustment for inflation, to a total $30.2 billion. During 2000, multifamily starts had declined by 0.2 percent as spending on these units had increased 2.3 percent between 1999 and 2000.
Building permits bode well
Recent trends in building permits suggest that the market will be relatively stable during the first half of this year. The total number of permits issued for construction of buildings with five or more units was 2 percent less during January-November 2001 than during the same period of 2000. Total multifamily units for which building permits were issued was 0.4 percent less through the first 11 months of 2001 than during January through November of 2000.
Multifamily permit trends were highly variable across the nation last year. Six of the nine regions of the country saw permits for multifamily starts fall below their level of a year earlier. Almost one of every three permits for multifamily construction through November 2001 was issued in the South Atlantic region. The largest percentage gains were recorded in the Rocky Mountain and New England states. Florida remained the volume leader with 42,723 units permitted.
Regional trends in multifamily permits
(Units to Nov. 2001, percentage change Jan.-Nov. 2000)
|Source: U.S. Department of Commerce
|East North Central||35,917||-6.4|
|West North Central||16,591||-8.4|
|East South Central||9,708||-35.3|
|West South Central||32,300||8.4|