Multifamily Plunge - April
Mulifamily Starts Plunge Whopping 74% Y-O-Y to 78K Units; Can They Fall Further?
Source: www.multihousingnews.com
According to the Census Bureau’s latest report, new home construction fell to its lowest pace on record in April.
For April, multi-housing starts have dropped to 78,000 units, down 42 percent from last month and a significant 74 percent drop year-over-year.
Steve Wendel, Co-Head of Deutsche Bank Berkshire Mortgage (DBBM), tells MHN, “With the big investors to the LIHTC program—Fannie Mae, Freddie Mac and big banks—having dropped out of the investor market, and with very little availability of debt financing, there is no money to pay for new construction. In most markets, occupancy levels are low and rents are falling. In these circumstances, new construction just doesn’t pencil out."
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A small community, I heard two general contractors in line at Starbucks, it'd be a good political cartoon actually. One contractor asked the other, How things are going?" The contractor replied, "No work I just come and get my coffee and go home." Investors, general contractors, carpet and tile installers, landscapers, the suppliers like Home Depot and Lowes are all ready and willing in anticipation. All factors of our economy are effected by tight purse strings. When lending opens up, we'll be back in business like a steam engine.
With rents falling it doesn't make sense to build new multi family properties. The demand is not there for apartments and the supply is too great.
This was a very telling article about how housigg starts dropped to historical lows. On statistic was overwhelming in the article "Multi-housing starts for April are down to 78,000 units, a 42 percent drop from last month and a whopping 74 percent drop year-over-year." We need a economic turnaround!
- Owen Ahearn | Flag this comment for review