More important than unemployment for apartment building investors?

We all know that jobs are a critical driver of the apartment building investment cycle and so we dutifully follow along with the talking heads when the unemployment number is estimated, released and then its potent debated.  But Mike Scott over at Dupre+Scott points out in a piece posted Friday that apartment building investors should be following employment, not unemployment. Specifically he recommends measuring how many jobs it takes to create demand for one apartment unit. Currently in King County (where Seattle is the county seat and where Dupre+Scott is located) it takes about 8 jobs to do that:

jobs required to fill one multifamily unit
Source: Note that we compressed Mike’s four charts into one for brevity.

The formula is simple: Net new jobs / apartment units absorbed. And if you’re an multifamily investor in the tri-county area (King, Pierce and Snohomish in WA State) that Dupre+Scott provides apartment investment research for, they’d be happy to supply you this information

Looking at the chart we can see that while currently it takes about eight jobs to fill one unit it wasn’t always so and in fact the twenty year average is closer to nine. Mike explainsin his piece what the causes were that moved the number around. I would caution anyone looking at numbers in their own market not to blanketly apply the 8 to 1 formula because ‘your mileage may vary’ as they say. Seattle is one of the best cities in the US for full time employment growth and this year Forbes ranked it in the top 5 for cities with good jobs.

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