MF Builders Upbeat Despite Projections

Builders and managers of multifamily properties are "cautiously optimistic" about their prospects over the next six months, according to new indices from the National Association of Home Builders, despite NAHB projections calling for a slide in the apartment sector.Multifamily starts are projected to fall from 336,000 units last year to 322,000 units this year and then rebound to 334,000 units in 2004, according to the NAHB forecast released at the association's annual convention in Las Vegas. But the 350 apartment builders and managers who responded to the NAHB survey on which the new Multifamily Housing Market Indices are based were a little more enthusiastic. On the supply side, builders who produce low- and moderate-income rentals anticipate little change in activity levels, but those who build market-rent and for-sale units think a small rebound is in the offing. On a scale of zero to 100, with 50 being average, the index for market-rent apartments projects a jump from 41.0 to 46.2, while the index for for-sale units calls for a rise from 51.1 to 53.3. On the demand side, multifamily practitioners expect occupancies to rise in the next six months, especially in the class A luxury and class B market-rate sectors.