The Census Bureau’s preliminary estimate of starts in buildings with five or more apartments for October came in at 183,000 (on a seasonally adjusted annual basis), down 13 percent from a September number that itself was revised downward by 7 percent. However, the September number was obviously a temporary spike—and, from the perspective of an industry trying to recover from a severe recession, the news for October is still basically positive. The October five-plus starts rate of 183,000 is the third highest number posted in 2011, and higher than any in 2010.
Through the first 10 months of 2011, a total of 138,100 five-plus units have been started. To put this in perspective, only 104,000 five-plus units were started in all twelve months of 2010, and only 98,000 in 2009. So production of apartments in buildings with at least five units is looking stronger in 2011 than it has been the past couple of years, although obviously still low compared to the 1997-2007 period when the five-plus starts rate hovered around 300,000 per year.
The permit numbers in the Census Bureau’s October construction report also provide a reason for guarded optimism in the outlook for multifamily production. The annual rate at which new five-plus permits were issued increased nearly 30 percent in October, up to 202,000. This is the first time in three years that the five-plus permit rate has been over 200,000.