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Multifamily Investors Advised to Hold as Market Faces Tough Times

GREATER BOSTON-Demonstrating that the multifamily market here is hit hard by the economic downturn, Torto Wheaton predicts negative absorption rates and increased vacancy rates for that market in this area in the coming few years.

By Naomi Grossman | Updated on November 26, 2001

GREATER BOSTON-In a sharp turnaround for the multifamily housing market here, locally based Torto Wheaton Research predicts negative absorption rates for that market in this area for the next few years.

“The multi housing market here basically has more supply than what is taken by the market,” Shiawee Yang, a senior economic consultant at Torto Wheaton and an associate professor of finance at Northeastern University, tells GlobeSt.com.

The vacancy rates for the multi housing market here jumped from 2.7% last year to 3.8% at the end of this year and Torto is forecasting that that number will climb to 4.4% by the end of 2002. “That is a big jump,” notes Yang. “It takes us back to the mid 1990s.” According to Yang, a number of Boston suburbs are already seeing very significant jumps in their vacancy rates, among them Brookline, Watertown and Waltham as well as suburbs west of the city. “For 2001 the vacancy rates forecast were definitely realized in those towns and some of these towns will see even higher vacancy rates than what we’re forecasting,” says Yang. The anecdotal evidence is demonstrated in a story Yang tells of a broker she knows in Brookline. “In the summer she had almost zero units vacant, and now she has vacant units in the 100s.”

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