After many slow years, home building is now steadily contributing to economic growth. An important factor has been the expansion of multifamily construction, such as apartment buildings and condominiums.
Because of the housing crisis, homeownership is down especially among younger households. Also, the total number of households is down compared to where it should be considering the population growth. This current trend has translated into potential for household formation, with most of them expected to become renters as market conditions improve.
The result for the building industry has been an increase in demand for rental units, which has reduced rental vacancy and increased demand for multifamily construction. The number of empty rental units has decreased greatly in the last two years according to the Census Bureau; the current measure is comparable to numbers seen in early 2002.
With fewer numbers available for a growing number of renters, 2012 sparked a significant growth in multifamily construction. After falling to a low of 75,000 units a year in 2009, new construction is now estimated at 306,000 annually, a forty-nine percent improvement, and this growth should continue.
Multifamily starts should increase another thirty-one percent over the 2012 figures to 335,000 total units for the year. This additional activity should add jobs to the construction industry, approximately 1,110 jobs for every 1,000 multifamily units built.
If you are looking to purchase or sell real estate, feel free to contact Pulgini & Norton, LLP at (781) 843-2200 or (888) 344-2046, or email us with any questions you may have. Our attorneys offer nearly 40 years of combined legal experience and provide thorough, timely, and results-driven service in many aspects of both residential and commercial real estate.
Multifamily Housing Growth Poised to Continue in 2012, U.S.News, February 13, 2013