The 2008 National Apartment Index Report is now available! Our reseach services are the national industry leader and the information is the most comprehensive.

The report covers forty-five different apartment markets across the United States. The specific local information will give you insight required to make proper sound decisions for investing.

Below you will find summaries of the information provided. However, the specific market information covers: employment trends, supply and demand, rent & sales trends, along with market outlook and forecast. This information is crucial to the investor and making a decision without it can be reckless.

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National Apartment Index

San Francisco moved into the top position in this year’s index, supported by low housing affordability, improving vacancy and above-average effective rent growth.

San Jose and Tucson climbed into the top 10, as both gained eight positions in the ranking. Above-average effective rent growth and tightening vacancy moved San Jose to #4, while vacancy improvement and strong employment growth bumped Tucson up to #9.

Many of the markets that had significant gains in occupancy over the past several years due to the removal of stock for conversion are some of the hardest-hit markets in this year’s index. Stiff competition from the shadow market will weigh heavily on the Florida markets in particular.

National Economy

Employment growth is expected to slow slightly this year to 0.9 percent with the addition of 1.25 million jobs. The educational and health services and tourism sectors will remain top drivers of job creation in 2008. Unemployment is forecast to rise to approximately 5 percent this year, up from an estimated 4.8 percent at year-end 2007.

GDP growth is projected to slow slightly in 2008 to 2.1 percent, with growth weighted toward the second half of the year. Further deterioration of the housing market and subprime mortgage losses pose significant risks to our outlook, however, as $216 billion of subprime and Alt-A ARM debt is due to reset for the first time in 2008. On a positive note, corporate balance sheets are strong, and the weak U.S. dollar is generating increased export activity.

Core inflation appears to be under control, even as oil prices remain elevated, and employment continues to surprise to the upside. With prices rising at a relatively tame pace, the Fed’s ability to steer the economy away from recession should remain intact this year.

National Apartment Market Overview

Overall construction costs are expected to rise in 2008, though the cost of specific materials may stabilize due to the cooling housing sector. High land prices, however, will continue to make it tough to pencil out new development. Rents have increased recently, but they still fail to justify new development in many markets.

Developers are expected to deliver 100,000 apartments this year, up from 84,000 units in 2007. This year’s new supply will remain moderate compared to the late 1990s through 2001, when construction averaged closer to 170,000 units per year.

Apartment vacancy is forecast to hold steady at 5.8 percent in 2008 as added competition from the shadow-rental market is offset by expansion in the renter pool due to foreclosures. Asking rents are expected to rise 4 percent this year, while effective rent growth will be limited as a result of the increased use of concessions to compete with shadow-rental stock.

Marcus & Millichap 2008 National Apartment Report