New Rental Apartments Readily Absorbed, Most Under 3 Bedrooms

The Census Bureau reported this week that there were approximately 31,600 privately financed, non-subsidized rental apartment units completed in the fourth quarter of 2012, up slightly from the 30,300 units completed in the third quarter but more than double the number completed a year earlier - 15,300. Survey of Market Absorption 2012 Characteristics Report is one of a series of quarterly and annual reports the Bureau issues detailing the construction, absorption and characteristics of rental housing units. The seasonally adjusted data presented in the report covers the fourth quarter of 2012.

The Bureau estimates that, on a seasonally adjusted basis, about 65 percent of the new, unfurnished units built during the quarter were rented (absorbed) within three months of completion, about the same rate as in the previous quarter but slightly higher than the 55 percent reported a year earlier. On a non-adjusted basis the three month absorption rate varied by only a couple of points for each of the reporting periods.

The median asking price for rents in buildings with five units or more was $1,089, down from $1,178 in Quarter Three and $1,126 one year earlier. The Bureau does not consider these variations to be significant.

Forty-three percent of the completed units contained two bedrooms and 35 percent were one bedroom units. Efficiencies (studios) accounted for 14 percent and units with three or more bedrooms 8 percent.

The largest number of rental units were constructed in the South (61 percent). The other regions trailed at 24 percent in the West, 11 percent in the Midwest, and only four percent in the Northeast.

There were an additional 8,100 apartment units completed during the quarter that were federally subsidized or received a tax credit. About 500 more did not fall within the scope of the Census Bureau survey. Data on furnished units were not published because they did not meet publication standards for confidence intervals.

The survey also included condominium units and cooperative apartments, about 1,800 of which were completed during the quarter in buildings with five or more units. This was about the same number reported in the third quarter but well below the 3,400 units completed in the fourth quarter of 2011.

About 78 percent of the completed units were sold within three months of completion, up 20 percent from quarter three. The median asking price for a unit was $316,000.