In the fourth quarter of 2012, NAHB’s Multifamily Vacancy Index (MVI), which measures property owners’ confidence in the strength of the market for existing rental apartments, improved slightly—falling two points to 31. Because the MVI captures the industry’s sentiment about apartment vacancies, lower numbers are better.
After peaking at 70 in the second quarter of 2009, the MVI declined consistently through 2010 and has remained at a fairly low level in the low to mid 30s throughout 2011 and 2012. So, in this respect, the fourth quarter gave us more of the same.
Historically, the MVI has tended to foreshadow the Census Bureau’s measure of rental vacancies in buildings with 5 or more apartments. When conditions are changing, the MVI generally turns at least one quarter before the 5+ vacancy rate.
Recently, both measures have been edging downward. At 31, the MVI is currently as low as it’s been since NAHB initiated the survey in 2003, while the 5+ vacancy rate has dipped below 9 for the first time since 2000.
The MVI is one of two main sentiment indices produced from NAHB’s quarterly survey of multifamily developers, property owners, and managers; the other being the Multifamily Production Index (MPI). For more information, including a complete history for both indices and all of their components, see NAHB’s web page for the MPI & MVI.