14 January 2015 | Multi-Housing News

Per

cent

age

Cha

nge

Mon

th-o

ver-

Mon

th

Jul. ’14 Aug. ’14

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Cement

Gypsum

Softwood Lumber

Plywood

Steel

0.2

-0.3 -0.2

-0.9

-0.1

-1.9

2.5 2.4

4.7

0.1 0.0 0.00.3

1.3

0.1

Sep. ’14

Building Materials

Building Materials: Inputs to construction rose by 1.6 percent on a not seasonally adjusted basis over the 12 months ending in September 2014. This component of the Producer Price Index is composed of the prices of inputs to new construction and the prices of maintenance and repairs. Over the past year, the prices of inputs to new construction increased by 1.5 percent. The prices of inputs to new non-residential construction rose by 1.0 percent, but the prices of inputs to new resi-dential construction grew by 2.0 percent. Meanwhile, maintenance and repair prices grew by 1.8 percent over the past year. Prices of inputs to non-residential maintenance and repairs rose by 1.8 percent while inputs to residential maintenance and repairs grew by 1.4 percent. On balance, individual materials prices recorded year-over-year price growth. Prices of gypsum products rose by 7.5 percent, cement prices rose by 5.7 percent and softwood plywood prices rose by 14.7 percent. Meanwhile, oriented strand board (OSB) prices fell by 8.6 percent.

Multifamily Starts: Housing starts of buildings with five or more units, measured at a seasonally adjusted annual rate, rose by 18 percent over the month of September 2014 to 353,000. This increase followed a 31 percent month-over-month decrease recorded in August 2014. In re-sponse to the volatility often seen in this data, the three-month moving average is used to smooth the data’s gyrations. In September 2014, the three-month moving average of housings starts of buildings with five or more units reached a post-recession high of 360,000 units, a 6 percent increase over the 341,000 that was recorded in August 2014 and 2 per-cent over the last high of 351,000 that was recorded in July 2014. The three-month moving average level of housing starts of buildings with five or more units that was recorded in September 2014 represents the sixth consecutive month that this measure has exceeded 340,000 and the 11th consecutive month that it has exceeded 300,000.

Source: Commentary and Data supplied by Michael Neal, senior economist, National Association of Home Builders.

Michael Neal is a senior economist with the National Association of Home Builders (NAHB). In this capacity, he monitors macroeconomic and financial issues that affect the U.S. and local housing markets. Prior to join-ing NAHB, he worked at the Joint Economic Committee of the U.S. Congress, the Federal Reserve, the Con-gressional Budget Office and Goldman, Sachs & Co.

news & notes

Market PulseMarket Pulse section compiled by Keat Foong, executive editor. To comment, email kfoong@multi-housingnews.com.

Multifamily Starts: Housing starts of buildings with five or more units,

250,000

300,000

350,000

400,000

450,000

Uni

ts

May Jun. Aug. Sep.Jul.Oct.’13

Nov. Dec. Jan.’14

Feb. Mar. Apr.

322,000

353,000

Multifamily Starts

MHN ONLINE

For more market statistics and reports, visit www.multi-housingnews.com

www.multi-housingnews.com | January 2015 15

0.0%

1.0%

2.0%

3.0%

4.0%

May Jun. Aug. Sep.Oct.’13

Nov. Dec. Feb.Jan.’14

Mar. Apr. Jul.

3-Month Libor0.24%

3-Month Libor0.23%

10-YearTreasury2.62%

Prime Rate 3.25%

10-YearTreasury

2.53%

Prime Rate3.25%

Interest Rates

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Per

cent

age

Cha

nge

Mon

th-o

ver-

Mon

th

May Jun. Jul. Aug. Sep.Oct.’13

Nov. Dec. Jan.’14

Feb. Mar. Apr.

Rent 2.3%

CPI 0.2%

Rent4.0%

CPI1.0%

$180,000

$190,000

$200,000

$210,000

$220,000P

rice

Apr. May Jun. Jul. Aug. Sep.Oct.’13

Nov. Dec. Jan.’14

Feb. Mar.

$196,500

$205,200

CPI vs. Rent: The seasonally adjusted Consumer Price Index—Urban Consumer (CPI) rose by 0.1 percent in September 2014. The monthly increase in consumer prices reflected higher prices for food and shelter. Meanwhile, energy prices fell. In September 2014, energy prices fell by 0.7 percent on a monthly basis as gasoline prices declined by 1.0 per-cent. In contrast, food prices rose 0.3 percent over the month. Excluding the more volatile energy and food prices, “core-CPI” rose by 0.1 percent over the month of September 2014. Shelter prices, which account for the largest portion of consumer expenditures, rose by 0.3 percent as rental prices increased by 0.3 percent. Since rental prices rose faster than overall inflation, as measured by core-CPI, then real rental prices also rose. NAHB’s Real Rent Index increased by 0.2 percent over the month of September 2014 and by 1.6 percent over the past year.

Existing Condo Sales and Prices: Existing condo and co-op sales, measured at a seasonally adjusted annual rate, fell by 5.2 percent over the month of September 2014. Regionally, the 23.1 percent increase in exist-ing condo and co-op sales in the West was responsible for the month-over-month increase nationwide. While existing condo and co-op sales in the West region rose, sales in the other regions of the country, the North-east, the Midwest and the South, were unchanged over the month. The existing condo and co-op inventory rose by 2.7 percent over the month to 262,000 units. Although the inventory of existing condo and co-ops rose, sales of these units grew even more. As a result, the months’ sup-ply, which represents the number of months it would take to exhaust the existing condo and co-op inventory at the current sales pace fell, declining by 1.9 percent over the month to 5.2 months. Median existing condo and co-op sales prices rose by 3.2 percent on a not seasonally adjusted basis over the past year to $205,200.

CPI vs. Rent

Existing Condo Median Sales PriceIn

dex

Apr. May Jun. Jul. Aug.Sep.’13

Oct. Nov. Dec. Jan.’14

Feb. Mar.

0.84

0.6

0.7

0.8

0.9

1.0

0.89

NAHB/First American Leading Markets Index*

*An index value above 1.0 indicates the market has advanced beyond the previous sustainable level of economic activity.

16 January 2015 | Multi-Housing News

news & notes

Unemployment RateSeasonally adjusted, 16 years and over

Source: U.S. Bureau of Labor Statistics

5.0%

6.0%

7.0%

8.0%

Apr. May Jul.Jun. Sep.Aug.Oct. Oct.

5.8%5.9%

Nov. Dec. Mar.Feb.Jan.2013 2014

Per

cent

age

of

Une

mp

loye

d

Apartment Equity REITs PerformancePeriod to Date Performance (%)

Dividend Yield (11-14-14) Price Return (11-14-14) 3.19 -1.05 Total Returns (as of 11-14-14) 11-14-14 Q-T-D Y-T-D -1.05 11.22 28.09

Compound Annual Total Returns Through Prior Month’s Close

1-Year 5-Year 10-Year 28.09% 21.81% 11.44%

Source: National Association of Real Estate Investment Trusts

Apartment Total ReturnsInternal Rate of Return on Investment

Commercial Real Estate Total ReturnsInternal Rate of Return on Investment

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Inve

stm

ent

Ret

urns

2012 2014

Q3 Q3Q1Q1 Q3 Q1 Q3 Q1

2.482.21

2.41 2.53

3.343.60 3.48

2.79 2.772.43

2.812.57 2.50 2.48

4.21

2011 2013

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Inve

stm

ent

Ret

urns 3.36

3.94

3.302.96

2.59 2.682.34

2.54 2.57 2.59 2.532.74

2.912.63

2.87

2011 2012 2014

Q3 Q3Q1Q1 Q3 Q1 Q3 Q1

2013

Source: National Council of Real Estate Investment Fiduciaries

Multifamily MortgageDebt Outstanding

Source: Mortgage Bankers Association

CMBS, CDO andother ABS Issues

State and Local GovernmentRetirement Funds

Private Pension Funds

Non�nancial CorporateBusiness

Federal Government

2014Q2

Bank and Thrift

Agency and GSEPortfolios and MBS

State and LocalGovernment

Life Insurance Companies

Nonfarm NoncorporateBusiness

Billions

REITs

Finance Companies

2014Q1

$0 $100 $200 $300 $400

391.9390.9

271.7

75.0

86.8

53.8

15.1

2.02.0

2.02.1

3.63.3

0.40.4

281.2

74.8

88.6

54.5

15.2

13.613.7

1.91.9

18 January 2015 | Multi-Housing News

Top 10 Multifamily Sales: New York CitySeptember 2014

ADDRESS BOROUGH SALE PRICE SALE DATE

1660-1680 Second Ave. Manhattan $395,000,000 22-Sep-14

147-07-147-11 72nd Rd. 147-08-147-12 72nd Rd.

Queens $216,000,000 8-Sep-14

150-16-150-20 72nd Rd. 72-60-72-64 150th St.

73-07 153rd St. 147-40-147-44 73rd Ave.

150-16-150-20 73rd Ave. 147-42-147-46 75th Ave.

150-18-150-24 75th Ave. 153-04 -153-10 75th Ave.

150-18-150-22 72nd Dr. 72-24-72-30 Kissena Blvd.

114 Fulton St. Manhattan $171,000,000 22-Sep-14

389 East 89th St. Manhattan $158,500,000 19-Sep-14

27 East 62nd St. Manhattan $120,000,000 17-Sep-14

385-387 First Ave. Manhattan $111,500,000 19-Sep-14

160 East 88th St. Manhattan $90,000,000 22-Sep-14

461 Dean St. Brooklyn $51,754,015 30-Sep-14

150-154 West 82nd St. Manhattan $41,500,000 22-Sep-14

1500 Noble Ave. Bronx $38,000,000 18-Sep-14

Source: PropertyShark

news & notes

Market Pulse section compiled by Keat Foong, executive editor. To comment, email kfoong@multi-housingnews.com.

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