The Census Bureau’s preliminary estimate for starts in buildings with five or more apartments in December came in at 164,000 units (at a seasonally adjusted annual rate). Although there is no hard and fast rule, buildings with at least five apartments are generally the universe of interest to businesses that specialize in building, owning, and managing multifamily housing.
At 164,000, the five-plus starts rate is down 28 percent from the revised rate for November (with November being a 3-year high point that was clearly unsustainable). On a year-over-year basis, however, the December 2011 five-plus starts rate was actually up 69 percent. Moreover, the December rate is close to the total of 167,000 five-plus units started in calendar year 2011 (also a preliminary number that will be subject to a couple months of revisions), which is up 60 percent over 2010. Given that five-plus production is only a year removed from a historically low period (when the starts rate often dipped below 100,000), the overall upward trend in the annual numbers is a welcome sign.
Meanwhile, the annual rate at which new five-plus permits were issued in December was 209,000. Although this is down 6 percent from November, it remains a relatively healthy number compared to recent history. Prior to November of 2011, the five-plus permit rate stayed below 200,000—often far below—for an extended period stretching back to 2008.