Oct/Nov 2011 Outlook.

■Increased caution among prospective homebuyers, together with steep financing hurdles, will continue to slow home sales, a trend that will strengthen apartment operations. In addition, the apartment sector is benefiting from tight supply conditions; stock additions over the first two quarters of 2011 marked one of the lowest 6-month totals on record. As a result, U.S. apartment vacancy retreated below the 10-year annual average of 5.9 percent in the second quarter. Although more projects are starting to move forward, the supply/demand balance will remain favorable, with vacancy to close 2011 at 5.6 percent.