FAQs

What is the Survey of Market Absorption of New Multifamily Units (SOMA)?

The Survey of Market Absorption of New Multifamily Units (SOMA) is a survey conducted by the Census Bureau that covers new units in multifamily residential buildings with five or more units. It tracks the absorption rates of these new units within different time periods after completion.

What does the absorption rate indicate?

The absorption rate indicates the percentage of new apartment units that are occupied or rented within a certain time frame after completion. A higher absorption rate usually indicates a healthier demand for new properties in the market.

How have the absorption rates for apartments and condominiums changed over time?

The absorption rates for apartments and condominiums have seen fluctuations over the years. While the absorption rate for apartments has fallen from a peak in the third quarter of 2021, the rate for new condominiums and cooperative units has seen a slight increase in the first quarter of 2024 compared to the previous year.

What factors influence absorption rates?

Absorption rates can be influenced by various factors such as economic conditions, population growth, housing supply and demand dynamics, interest rates, and market trends. Factors like job growth, affordability, and location also play a role in determining absorption rates.

Conclusion

The latest release of the Survey of Market Absorption of New Multifamily Units (SOMA) shows a positive trend in the absorption rates of new apartment units and condominiums. While absorption rates have fluctuated over time, the current increase in absorption rates indicates a growing demand for new multifamily properties in the market. As completions of new units continue to rise, it will be essential to monitor absorption rates closely to understand market trends and dynamics.