The condominium market is surging nationwide as financing trickles back into a real estate class shunned by lenders for years since the downturn.
The revival also comes amid an increase in demand for rental properties, pushing the apartment vacancy rate in the U.S. to the lowest level in decades. Rental rates are responding with an uptick in urban areas, while the availability of for-sale apartments remains historically low.
“We’re in the very early stages of a long recovery in condos,” Sam Khater, deputy chief economist with CoreLogic told Bloomberg. “Now you’re seeing rental booming, but today’s renters are going to be tomorrow’s condo buyers.”
Builders kicked off construction on 22,000 for-sale multifamily homes last year, up 4.8 percent from 2012 and 47 percent from a post-crash low in 2010, according to Census Bureau data cited by Bloomberg. In the first quarter of 2014, 8.5 percent of the 71,000 multifamily units were built for selling rather than renting — up 6.9 percent from the same period a year ago.
During the pre-crash housing boom, for-sale units constituted 45 percent of multifamily home starts.
Luxury condominium construction began to gather steam in Manhattan, San Francisco and Miami three years ago, with all-cash international buyers driving activity. Now, smaller markets are catching up. [Bloomberg] — Julie Strickland