Thursday, February 3, 2011

Builders Forecast Demand Exceeding Supply of Multi-family Housing

New job creation amid a slowly recovering economy is creating increased demand by renters, but the lack of credit needed to finance the development of apartments is already causing rents to increase.  This supply/demand ratio will most likely to lead to a shortage of available apartments in the next few years, as forecast by the nationwide builders' association, the National Association of Home Builders (NAHB).

“Although we are forecasting construction of 133,000 new multifamily residences in 2011,” said the NAHB chief economist, David Crowe, “that is far short of the 250,000 to 300,000 units that would be required to keep supply and demand in balance. In addition, we have yet to make up for the insufficient number of new apartments that should have been built over the last two years. The capital needed to finance that construction is just not available to apartment developers.”

Even affordable rental housing is feeling the pressure. Robert Greer is president of Michaels Development Company, Marlton, N.J., a company that develops and manages affordable rental communities throughout the country. According to Greer, “Affordable housing, which is primarily driven by the Low-Income Housing Tax Credit program, is rebounding. Investors are slowly coming back into the market, and deals are getting done…which is good news. But the bad news is that given the depth of the current recession, more people than ever need affordable housing, and the demand far outstrips the supply.”

If you are a builder who wants to develop some multi-family units in Mercer County or the surrounding areas, call or email me and lets talk about your options.

Joe Giancarli, SA
Real Estate Advisor

Find homes for sale using my new mobile app. Just text JOEG to 87778 and you will be sent download instructions. Once installed on your device, you will be able to do searches and see complete listing details including photos and prices. If your device is GPS enabled you will also see the listings on a map. (Data rates may apply.)

No comments:

Post a Comment

Site Meter