In the fourth quarter of 2011, NAHB’s Multifamily Vacancy Index (MVI) declined for a second consecutive quarter—from 35.1 to 34.7 The MVI is based on a quarterly survey of NAHB’s multifamily members, tracking their sentiment about the market for existing apartments on a scale from 0 to 100. A declining MVI is a positive change, as it indicates that sentiment is moving toward fewer vacancies.
The MVI has remained essentially stable for roughly a year, hovering in a range between 33.3 and 36.1. This followed an extended period during which the MVI remained above 40—often far above—from mid-2007 through mid-2010, roughly coinciding with the period when the Census Bureau’s vacancy rate in buildings with 5 or more apartments was above 11 percent (although the 11 percent-plus 5-plus vacancy rates didn’t begin until 2008).
The Over its 9-year history, the MVI has generally foreshadowed movement in the Census 5-vacancy rate. In the third quarter of 2011, for example, the 5-plus vacancy rate increased substantially—from 10.0 to 10.8 percent. The relative stability of the MVI during this period suggested that the third-quarter surge in the Census measure was likely to prove a temporary setback that would be reversed in the near future. This proved to be the case in the fourth quarter, as the Census 5-plus vacancy dropped back to 10.1 percent, essentially the same as it had been in the second quarter of the year.
For more information, including historical tables for the MVI, see http://www.nahb.org/reference_list.aspx?sectionID=238.