Witten Advisors: Multifamily sector gets boost as move-ins rise
If there is a beneficiary in the real estate downturn, it has been the multifamily sector, according to a market firm that studies the space. Net move-ins, nationally, in the second quarter, are higher than they have been in the past 15 years when comparing on a second-quarter basis, said Ron Witten, president of Witten Advisors, a Dallas-based consultancy that serves apartment developers, investors and lenders nationally with a focus on 40 major apartment markets. More than 116,000 units were absorbed in 2Q10. In comparison, the second highest rate of net absorption over the past 15 years was experienced in 2Q05 when 103,646 units were absorbed nationally. 1995, 2001 and 2009 all had negative absorption rates in the second quarter. Witten's comments were part of a wide-ranging panel discussion on local and national real estate trends held in Dallas Wednesday and sponsored by the North Dallas Chamber of Commerce. Part of the reason for the rosy outlook for apartment development and leasing is the growth in young adult hiring, Witten said. There have been 973,000 jobs added for young adults over age 20 in 2010 through August, he said. That is the best market for this age group since 1984, he said. And because over half of people under age 35 are renters, the apartment segment is benefiting. The national decline in home ownership is also boosting rental activity. Apartment starts, however, remain at the bottom of a 20-year curve, below 75,000 starts in the first quarter for apartments with five or more units. That compares to more than 250,000 quarterly starts at the top of the market during the 2002-2005 time frame. The likelihood of more development looks bright as demand grows and rents stabilize and begin an upward climb, Witten said. Write to Kerry Curry.