There are fewer vacant apartments for rent in this country than at any time in the past two decades, a new real estate industry survey shows. One of the reasons is that last year saw the lowest number of apartments built since 1961.
As a result, reported Advance Mortgage Corp. and Citicorp Real Estate, Inc., which are both affiliates of Citicorp., starts of multifamily dwellings will increase by 45 per cent this year. They estimate that the 550,000 units begun in 1977 will be two times greater those started two years earlier.
The quarterly survey, entitled "U.S. Housing Markets," also said that new a partment activity in the East and Midwest will remain at a level far below the market demand. California and Texas, on the contrary, are "hot," with construction sales and rentals booming. Last year, one third of all the apartment house starts occurred in those two states; this year they will account for about 15 per cent.
Moreover, the number of federally subsidized apartment starts is due to increase dramatically, according to Citicorp Real Estate president Philip Kozloff. Through more aggressive application of existing government programs - rather then new funds - starts of tenant-subsidy (Section 8) and GNMA-backed units are expected to reach 170,000 this year, up from 70,000 in 1976.
States where rental units vacancies were traditionally the highest now report the lowest vacancy rates in the country, 4.4 per cent compared with a national average of 5.1 per cent.In Los Angeles-Orange County, the vacancy rate has fallen to 2 per cent, one quarter of the norm. In San Diego, sewer moratoriums have cut the supply of available land by 25 per cent.
The largest increase of any major apartment market is expected to occur in the Dallas-Fort Worth area, which anticipates a two-thirds gain over last year. In Houston, on the other hand, building and rents have both leveled off.
Kozloff said that elsewhere, there is demand but insufficient construction because costs are high and owners can't raise rents fast enough to compensate.
The real estate firms forecast the return of the condominium, but added that only in California will building reach significant numbers. Elsewhere the backlog is still being absorbed. New condos are selling well once again in the Washington suburbs and Detroit, but sales are slow in Atlantic and Philadelphia. Miami-Ft. Lauderdale still has a high inventory of unsold condominiums.
Condo conversions, Kozloff noted are again taking place "on a massive scale" in Washington, Houston and Chicago. In the District, where the supply of large buildings suitable for conversion of 10- to 12-unit buildings, the firms said.