MultiFamily Market Outlook - 05/29/2003 (Plain Text Version)

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In this issue:
Multifamily Indicators — First Quarter 2003 Update
Starts Keep Climbing
Real Rents Still Trailing Inflation
Economic Forecast
MFSI Shows Sizable Increase

MFSI Shows Sizable Increase

During April, the MFSI went up by almost 50 points — just shy of 3.5%. With this sizable increase, the MFSI is 7% off its all-time high, and just 6% lower than it was a year ago. Since the end of March 2003, the S&P 500 with dividends rose a whopping 8%, yet it still is more than 13% lower than 12 months ago — a performance that's 7 percentage points worse than the MFSI.

Because the MFSI increased by almost 3.5% while the S&P 500 with dividends went up by more than twice as much, the percentage difference between the two indexes narrowed from 98 percent to 89 percent, a level surpassed for the first time this past July. With a strong showing in back-to-back months, the MFSI continues to dramatically outperform the S&P 500 over the past one, two, three, and four-year time time periods. Since December 1998, the MFSI has risen by nearly 50% while the S&P 500 with dividends has fallen by almost 21%. During April, the price-to-earnings ratio (P/E) of the MFSI edged up from 16.75 to 17.24, while the dividend yield — defined as the total cash dividend payments divided by the current stock price — fell from 7.77% to 7.45% The MFSI is an index of 29 publicly traded US headquartered firms principally involved in multifamily ownership and management.