Multifamily starts off, but spending up
Although the number of multifamily housing units started so far during 2001 has fallen a bit from the pace of a year ago, the number of dollars being spent on apartment/condominium building construction has actually been growing at an accelerating rate.
Through the first eight months of 2001, construction was started on a total of 219,500 units in multifamily buildings — 3.8 percent below the January through August 2000 starts total. During the same period, 3 percent more single-family homes were started than a year ago. However, the dollar value of construction on multifamily buildings through the first two-thirds of this year was 6.4 percent ahead of spending over the same period of 2000. Spending for single-family homes, on the other hand, was growing at an annualized rate of only 2 percent — slower than the increase in the number of starts.
This represents a continuation of a trend that has been in evidence throughout the past three years. Multifamily starts during 2000 were down a slight 0.2 percent from the 1999 level. But the current dollar (not-inflation-adjusted) spending to construct last year's 338,000 multifamily units was about $27.8 billion, or 2.3 percent more than during 1999. Although the number of multifamily units constructed during the past few years has plateaued, their average size, quality and overall value has increased.
Permits indicate stability
Year-to-date trends in building permits, an indicator of multifamily starts six months in the future, suggest the market, in volume terms, will be relatively stable over into the first quarter of 2002. The number of permits issued for construction in buildings with five or more units was 0.1 percent less during January-August 2001 than through the first eight months of 2000. Total multifamily units, including those in buildings with two, three or four units, for which building permits were issued totaled 1.7 percent more through August 2001 than during the same period last year.
Regional trends in multifamily permits
(Percentage change Jan.-Aug. 2000 to Jan.-Aug. 2001)
|Source: U.S. Department of Commerce
|East North Central||25,143||-5.8|
|West North Central||11,481||-9.4|
|East South Central||7,625||-19.4|
|West South Central||20,322||7.6|