Recovery not likely to harm multi-family sector

Miami /
Aug.August 27, 2012 03:45 PM

The housing market generally appears to be recovering, but CNBC said it’s not necessarily happening at the expense of the multi-family sector, which boomed as home sales and home prices plummeted.

The latest data shows home sales are rising yet prices for those homes remain flat. Simultaneously, rents continue to rise and push affordability back in favor of buying, CNBC said. Additionally, with multi-family construction up 30 percent annually in July and permits for such buildings 47 percent greater, an oversupply could be on the horizon. 

Still, because of the strict lending standards and several important cultural shifts, many housing experts told CNBC they don’t foresee the bottom falling out of the multi-family sector.

“For the first time since World War II, the United States is experiencing increased levels of urbanization,” Eric Bloom, a senior research analyst at Pike, told CNBC. “By 2021, over one-fourth of the residential stock of the United States will be in multi-unit residential buildings.”

That high demand is keeping the fundamentals for the multi-family sector strong, according to Chandan Economics founder Sam Chandan. Though the forthcoming supply may level off growth — and that has slowed investors’ interest in multi-family of late — it won’t deliver a big blow unless housing begins booming again. [CNBC] — Adam Fusfeld


Related Articles

arrow_forward_ios
(iStock)
Home prices across globe hit records, prompting worries of bubble
Home prices across globe hit records, prompting worries of bubble
Lennar Executive Chairman Stuart Miller (iStock)
“The home used to be just shelter. Now it is the hub of our entire lives”: Lennar reports strong Q4, full-year results
“The home used to be just shelter. Now it is the hub of our entire lives”: Lennar reports strong Q4, full-year results
Rent-to-own startup Divvy Homes expands to South Florida
Rent-to-own startup Divvy Homes expands to South Florida
Rent-to-own startup Divvy Homes expands to South Florida
Ben Schachter, Sean Black and Mike Pappas (Signature, Getty, Keyes)
Knock expands home lending program into South Florida 
Knock expands home lending program into South Florida 
Rendering of Belmont Village Coral Gables and Baptist Health South Florida CEO Brian L. Keeley
Baptist, Belmont gain approval for luxury senior living in Coral Gables
Baptist, Belmont gain approval for luxury senior living in Coral Gables
9885 Palomino Drive (Credit: Google Maps)
Resort Lifestyle Communities scores $36M construction loan for Lake Worth senior housing project
Resort Lifestyle Communities scores $36M construction loan for Lake Worth senior housing project
5010 Nob Hill Road (Credit: Google Maps)
Sunrise affordable senior housing facility sells for $30M
Sunrise affordable senior housing facility sells for $30M
Mark Zilbert
Let’s make a deal? Some resi sellers in Miami-Dade slash asking prices
Let’s make a deal? Some resi sellers in Miami-Dade slash asking prices
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...