The US Census Bureau’s Survey of Market Absorption (SOMA), which is produced in collaboration with the Department of Housing and Urban Development, recently released data from the second quarter of 2018. The data show that completions of unfurnished, unsubsidized rental apartments in buildings with five or more units totaled to 78,510, which is up by approximately 3 percent from the second quarter of 2017 (76,420) (Figure 1).
The data also show that 61 percent of these units were absorbed in the first three months after completion, or in other words, rented out. Between 2012 and 2015, second quarter absorption rates were in the territory of 65 to 70 percent, but then dropped to 57 percent in 2016. It has slowly inched up since then with a rate of 58 in 2017 and 61 in 2018 (Figure 1).
On the sale side of the market, completions of condominiums in buildings with 5 or more units reached a recent high of 8,518 in the second quarter of 2018, up 162 percent from the second quarter of 2017 (3,248) (Figure 2).
The condominium absorption rate stood at 71 percent in the second quarter of 2018, 3 percentage points down from the second quarter of 2017 (74 percent). Second quarter condominium absorption rates were relatively strong between 2013 (84 percent) and 2014 (78 percent), but slipped to 63 percent in 2015. They have since climbed to the low 70 percent range.
In addition to the SOMA data on completions and absorption rates, this blog usually reports on tax credit/subsidized apartment unit completions. However, the Census Bureau will no longer release this data on a quarterly basis and will only release it in its annual SOMA publication, which is published in April. We will report on the data after its release.