Sales velocity dropping, rentals increasing

Apartment sales velocity and new home starts nationwide decreased significantly in 2009, according to a Web seminar today about the apartment market hosted by Marcus & Millichap’s Multi Housing Group. The speakers were Linwood Thompson, managing director of the Multi Housing Group; Hessam Nadji, managing director for research services at the company; and William Hughes, managing director at Marcus & Millichap capital corporation. Sales velocity will likely pick up in the second half of 2009, partly because more distressed properties will hit the market then, the participants said. New home starts dropped 48 percent in 2008 and will decrease another 30 percent in 2009, but demand will exceed supply again by 2011. As sales and starts have declined, the number of renters has increased. The number of rental households has risen by 5 million over the past several years. TRD