Builder confidence in the 55+ housing market for apartments was significantly higher during the first quarter of 2011 according to the National Association of Home Builders (NAHB).
The NAHB’s expected demand index for 55+ multifamily rental units rose 10 points, to 44, from a year earlier. David Crowe, NAHB’s chief economist said that demand is for existing 55+ rental apartments is running ahead of production.
“A shortage may even emerge in that segment of the market, if pent-up demand emerges quickly but builders’ inability to access credit continues,” he said.
Demand for sales of single family or condos didn’t fare as well, declining 2 and 3 points, down to 17 and 8, respectively.
“Builders in the 55+ market are still finding that some customers are hesitant to buy,” said Ken Simons, a New Jersey developer and chair of the NAHB 50+ Housing Council Board of Trustees. “Many prospective 55+ buyers are having trouble selling their existing homes, a problem often made worse by low appraisals.”
The 55+ single-family HMI measures builder sentiment based on current sales, prospective buyer traffic and anticipated six-month sales for that market. A number greater than 50 indicates that more builders view conditions as good than poor. Among the index components, present sales dropped two points, to 15. Expected sales (six months into the future) dropped six points, to 24. And traffic of prospective buyers fell one point, to 17.
The 55+ multifamily condo HMI also showed weakness, with an index level of 8, down from 11 at the beginning of 2010. All three index components – current sales, expected sales and buyer traffic – declined during this period.
In contrast, indices of current and expected production of 55+ apartments gained 7 and 8 points, up to 20 and 27, respectively, in the first quarter of 2011. The index measuring current demand jumped 11 points, up to 39.