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Survey of Market Absorption: Third Quarter 2009

Third Quarter 2009 - Absorptions (Completions in Second Quarter 2009)

H130/09-Q3
Issued January 2010

U.S. Department of Commerce
Economics and Statistics Administration
BUREAU OF THE CENSUS

U.S. Department of Housing and Urban Development

Introduction

The Survey of Market Absorption (SOMA) measures how soon privately financed, nonsubsidized, unfurnished units in buildings with five or more units are rented or sold (absorbed) after completion. In addition, the survey collects data on characteristics such as number of bedrooms, asking rent, and asking price.

The estimates in this report are based on responses from a sample of the population. As with all surveys, estimates may vary from actual values because of sampling variation or other factors. All comparisons made in this report have undergone statistical testing and are significant at the 90-percent confidence level.

Highlights 1 Details may not sum to totals because of rounding.

  • An estimated 74,000 apartments were completed in buildings with five units or more in the second quarter of 2009. This estimate was about 20,100 greater than apartment completions in the previous quarter, and about 13,300 greater than completions in the same quarter of the previous year (table 11).
  • Of the 74,000 units completed in the second quarter of 2009, approximately 48,300 were privately financed, nonsubsidized, unfurnished, rental apartments. This estimate was about 20,000 greater than the revised estimate of unfurnished units completed in the previous quarter, and about 11,100 greater than completions in the same quarter of the previous year (Table 1).
  • An estimated 48 percent (seasonally adjusted) of the newly completed, unfurnished apartments built in the second quarter were rented (absorbed) within 3 months of completion. This estimate is lower by about five percentage points than the estimate of the previous quarter, but did not differ from the same quarter of the previous year (Table 1). The not-seasonally-adjusted 3-month absorption rate of 51 percent for the 48,300 apartments completed in the second quarter of 2009 did not differ statistically from that of the previous quarter, nor from the rate in the same quarter of 2008 (Table 1).
  • The median asking rent for all privately financed, nonsubsidized, unfurnished rental units completed in buildings with five units or more in the second quarter of 2009 was $1,153. This estimate is greater by about $133 than the revised median asking rent of the previous quarter. More new units built in the second quarter of 2009 contained two bedrooms (49 percent) followed by units that contained one bedroom (42 percent). Units with three bedrooms or more accounted for about 9 percent, while efficiencies (no bedroom) accounted for only 2 percent of the total (Tables 2 and 3).
  • During the second quarter of 2009, the South had more (52 percent) new unfurnished rental completions than any of the other three regions, followed by the West with 28 percent. The Midwest (12 percent) and the Northeast, with 7 percent of new unfurnished rental completions, did not differ statistically (Table 4)
  • An estimated 8,900 condominium and cooperative apartments in buildings with five units or more were completed in the second quarter of 2009. This estimate is 3,600 fewer than that of the revised estimate from the prior quarter, and about 2,900 fewer than the same quarter of 2008 (Table 5). In the second quarter of 2009, condominiums and cooperatives accounted for about 12 percent of all completions in buildings with five units or more.
  • About 35 percent of the 8,700 condominium apartments completed in the second quarter of 2009 were sold within 3 months of completion (Table 6). This rate is lower by about seven percentage points than the revised rate from the previous quarter. The median asking price for new condominiums built in the second quarter of 2009 exceeded the upper limit of the price range, and cannot be compared to the median asking price last quarter (Tables 6 and 7).
  • Of the remaining apartments completed in all buildings with five units or more in the second quarter of 2009, 100 were furnished units, 12,600 units were federally subsidized or received a tax credit, and about 4,100 were not in the scope of the survey (Table 11).

Characteristic of the Data

All statistics from the SOMA refer to apartments in newly constructed buildings with five units or more. Absorption rates reflect the first time an apartment is rented after completion or the first time a condominium or cooperative apartment is sold after completion. If apartments initially intended to be sold as condominium or cooperative units are, instead, offered by the builder or building owner for rent, they are counted as rental apartments. Units categorized as federally subsidized or receiving tax credits include the units subsidized under the following Department of Housing and Urban Development (HUD) or Federal Housing Administration (FHA) programs --Sections 8, 202, 811, 221(d)(3) or 221 (d)(4). In addition, units receiving Low Income Housing Tax Credit (LIHTC) through the Internal Revenue Service program are included in this category. The data on privately financed units include privately owned housing subsidized by state and local governments. Time-share units, continuing-care retirement units, and turnkey units (privately built for and sold to local public housing authorities after completion) are outside the scope of the survey.

Tables 1 through 4 and Table 9 provide information about privately financed, nonsubsidized, unfurnished, rental apartments. Table 5 provides information about privately financed, nonsubsidized condominium and cooperative apartments, while Tables 6 through 8 and Table 10 provide information about condominium apartments only. Table 11 summarizes the totals for all types of newly constructed apartments in buildings with five units or more.


Footnotes

1 Details may not sum to totals because of rounding.
Source: U.S. Census Bureau | Survey of Market Absorption of Apartments |  Last Revised: 2012-09-25T16:58:52.39-04:00