Multifamily permitting volumes are declining due to various challenges like pricey debt, falling rents, and regulatory hurdles. Apartment projects lead the drop in permits, with occupancy rates significantly down in cities like NYC and Washington DC. Construction starts are declining mainly due to economic infeasibility.
Apartment construction starts are rapidly declining, BUT not just because banks are pulling back on lending. That's not even the No. 1 reason. The biggest reason? The math no longer works. "Project is not economically feasible at this time" was the No. 1 reason for delays… https://t.co/Yac69ji7uo
"Semi-surprising not to see larger drops in Phoenix and Austin -- the two markets arguably experiencing the most intense lease-up digestion challenges right now. The pair rank 2nd and 3rd for permits issued in the last year behind NYC" https://t.co/eWmBy9On0h
Apartment projects are leading the drop in permits, according to a new study. https://t.co/qgeilFcalv
"Rental rates are not the real story here. The real story is occupancy rates," says @peebles_don. "Occupancy rates are down significantly. 40% is NYC. 50% in Washington DC. The only bright spots are places like Miami, Dallas, Austin where the markets are stronger." https://t.co/rph1h8KreT
It is easy to misunderstand current trends in multi-family construction. Mostly, it is being suppressed with local regulatory hurdles, with some temporary Covid-related supply chain issues. 1/ https://t.co/g1gvicryGw #FRED @stlouisfed https://t.co/XOIvUTYA8s
Nine thoughts on the latest multifamily permitting numbers: 1) Permitting volumes continue to trend down, down, down as developers hit a thick wall of headwinds: pricey debt, falling rents, fairly sticky construction costs, and fewer eager equity/debt partners. 2)… https://t.co/r1L6Jnu0ty