Rents, new construction, absorption, building permit totals and investor demand were all soft and are expected to remain that way, at least for the first half of 2002. Rent concessions, however, are growing. On the investment side, demand was steady but product was limited.
"Many potential sellers have decided to hold off on selling their properties, based on the current economic conditions," Robert W. Miller, senior vice president, multi-housing properties group, CB Richard Ellis, tells GlobeSt.com. "With increased demand and a reduced supply of properties on the market, we expect to see strong competition from buyers for those properties that do become available in 2002."
Private capital investors will be the group vying for the bulk of the assets, largely because of the low interest-rate environment, Miller predicts. However, "with fewer properties on the market for sale, we expect that during 2002, there will be fewer multifamily sales than in 2001," the CBRE executive says.
Rental demand, however, is softening. "We expect to continue to see demand slow down during the first half of 2002, with increasing demand seen during the latter half of the year," Miller says.
Average quoted monthly rents of $729 in metro Orlando rose 3% in 2001, but the average net effective rent, which factors in concessions "and is a more accurate reflection of the collected rent," increased only 1.3% during the year, the broker says.
Construction of only 6,794 new apartments compared to 13,900 units delivered in 2000. Of those 6,794 units, 5,958 units were rented. But only 800 units were rented in all of the second half of 2001.
Miller attributes a good part of the rental demand slowdown to the Sept. 11 terrorist attacks on New York and Washington, DC. "The aftershocks were felt strongly in the Orlando multi-housing market," the CBRE executive says.
Miller notes job growth for the 12 months ending in December 2001 was 3.2% (29,400 new jobs) while population growth was 3.5% (58,000 new residents).
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