NAHB: Multifamily to remain strong through 2013
The multifamily sector has led the overall housing market recovery and will continue to do so over the next several years, according to press conference panelists at the National Association of Home Builders (NAHB) International Buildersâ€™ Show (IBS) in Las Vegas this week.
The multifamily market has recovered substantially since the end of 2010 and now stands at about 70 percent of the way back to a sustainable level.
â€œLast year was a banner year for the multifamily market, and our baseline forecast calls for further steady growth in the rate of multifamily production,â€ said NAHB Chief Economist David Crowe. â€œWe are forecasting construction of 299,000 new multifamily residences in 2013. While this is an improvement from just a few years ago, it is still well below the 350,000 units that are required to keep supply and demand in balance.â€
Developers, however, see several difficulties that could hinder a full recovery.
â€œA lack of capital is restraining the ability of developers in many markets across the country from building apartment communities for residents of all income levels,â€ said Michael Costa, president and CEO of Highridge Costa Housing Partner LLC. â€œAdditionally, weâ€™re facing increases in the cost of building materials and construction labor, which makes it infeasible to build in certain circumstances.â€
NAHB panelists noted several reasons for optimism, however.
â€œThe market continues to improve as new household formations generate demand, especially in the market-rate rental segment,â€ said Lance Swank, president of The Sterling Group. â€œThere is also a change in attitude toward renting â€“ people like the flexibility it gives and the option to be able to easily move to another city or state for a job opportunity.â€
Source:Â Florida RealtorsÂ®