|New Research Estimates Value of the Apartment Sector for First Time; Finds the Nation's Apartments Represent $1.3 Trillion in Value
WASHINGTON, Oct. 22 /PRNewswire/ -- The National Multi Housing Council (NMHC) has published new research estimating the value of the nation's apartment stock and its growth over the past 10 years for the first time. According to the research conducted by leading academics in real estate finance and funded through a grant from Fannie Mae, the 16.1 million apartment units in the U.S. in buildings of at least five units are valued at approximately $1.3 trillion.
``Estimating the value of the existing stock has always been a complicated undertaking because of the lack of consistent and reliable data,'' noted Mark Obrinsky, NMHC's Chief Economist in releasing the report. ``Yet the estimated value has been sought by many diverse groups for several reasons. First, such an estimate allows the industry to flex its political 'muscle' by showing its size and value. It enables lenders and equity holders to determine what proportion of the market they represent and to evaluate their exposure. It allows industry suppliers to better measure the depth of the market. And finally, it enables us to estimate the overall equity in apartments by coupling it with existing data on the amount of mortgage debt outstanding.''
The research finds that the value of the apartment stock has increased from an estimated $767.1 billion in 1990, an average annual increase in value of 5.5 percent during the decade, substantially higher than the rate of inflation for that same period.
The analysis also provides the estimated value of the apartment stock in 71 of the largest U.S. metropolitan areas. Per square foot values of apartment units range from a high of $301.52 in San Jose to a low of $36.87 in Birmingham, AL. Based on value, as opposed to the number of units, the top 10 apartment markets are as follows:
Metro Area Stock Value Total
(000s) ($/SF) Valuation
New York, NY 1,761.0 $150.65 $226,871.4
Los Angeles, CA 928.2 $144.11 $111,975.1
Boston, MA 316.3 $203.33 $56,312.4
San Francisco, CA 225.7 $281.16 $51,188.1
Chicago, IL 724.9 $79.94 $47,833.5
Washington, DC 438.7 $123.12 $46,660.9
San Diego, CA 250.8 $154.25 $32,691.1
San Jose, CA 124.8 $301.52 $32,493.3
Oakland, CA 188.8 $193.98 $30,426.7
Orange County, CA 223.0 $153.74 $30,215.7
|The lead researcher on this project was Ken Rosen. President of Rosen Consulting Group, Ken is also a Professor of Business Administration and Chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley. He holds a Ph.D. in Economics from the Massachusetts Institute of Technology and has authored more than 95 articles and books on real estate finance. Joining him were Susan U. Persin and Daniel T. Van Dyke, Principals in Rosen Consulting Group and Jeanine Kranitz, an Associate in the firm.
|Based in Washington, DC, NMHC is a national association representing the interests of the larger and most prominent apartment firms in the U.S. NMHC's members are the principal officers of firms engaged in all aspects of the apartment industry, including ownership, development, management and financing. NMHC advocates on behalf of rental housing, conducts apartment- related research, encourages the exchange of strategic business information and promotes the desirability of apartment living. More than one-third of Americans rent their housing, and one in five Americans lives in an apartment. For more information, contact NMHC at 202/974-2300, e-mail the Council at [email protected], or visit NMHC's Web site at http://www.nmhc.org .
National Multi Housing Council