Posted on: February 16, 2012 by total
With pent up demand for multifamily why is the construction pipeline slow to respond? Credit underwriting. With a plethora of real estate assets available for sale why is sales volume year-over-year about the same? Credit underwriting. Real estate finance is not for the faint of heart. The credit pipes “frozen” in 2008 continue to un-thaw three years later. And reading demographic trend tea leaves is becoming a tricky business. With no end in sight to the current credit crisis, multifamily construction is hampered to the Nth degree. Multifamily owners benefit now, yes, with less product in the pipeline and pressure on rents. However, the need persist for more multifamily housing even as economy begs for construction jobs. With the lingering glut of foreclosures and limited consumer demand for new homes, housing starts have few friends. “Since the beginning of this recession the home ownership rate in the United States has dropped from 69% to 66%” – RBC Capital Markets Do we really need the housing starts going forward? Is there a pending housing shortage? Here are some facts: • Fact: U.S. population growth is slowing to around one percent • Fact: The average age is increasing to over 35 years old • Fact: The U.S.