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Coming Off Record Heights, Multi-Family Construction Expected to Slow
The multi-family development market is slowing from the pace that helped the economy break out of the Great Recession nearly a decade ago, according to an article by Shobhana Chandra, Vince Golle, and Jordan Yadoo.
Writing for Bloomberg, the trio of reporters identifies a softening in the multi-family segment as the single-family market is expected to build momentum.
Commerce Department data released last weekend showed "completions of multifamily units in October reached the fastest annualized rate in almost three decades," according to the article. Now that so many new multi-family units are coming on line, "the number of multifamily units authorized but not yet started also is cooling as builders attempt to calibrate the supply."
The article includes additional warning signs for the multi-family market as well as discussion about the potential consequences of the market trends. Renters will be happy to hear, for instance, that "an adequate supply of apartments -- both ready and in the pipeline -- could eventually put downward pressure on rental prices…" Other parties that stand to benefit from a softer multifamily market include single-family homebuilders, which are currently hampered by a tight labor market.