Condo Market's Loss Is Apartment Market's Gain
Builder confidence in the condo market dropped dramatically in the second quarter of this year, while confidence in the apartment market hit record highs.
There is "clearly an oversupply" of unsold condo units, NAHB Chief Economist David Seiders says. Vacancy rates for apartment buildings are dropping and rents are increasing, he says.
That's because apartment-to-condo conversions shrunk the rental market and boosted apartment demand, says Leonard Wood of Marietta, Ga.-based Wood Partners.
Bruce Menin, president of Crescent Heights, a New York City-based developer of high-rise condominiums, cautions local governments against requiring a large number of low-income units, as this could prevent developers from proceeding and result in a lean supply and higher prices in tight markets.
Wood, meanwhile, warns that impact fees and stricter building codes could hamper construction.
Source: Kansas City Business Journal, Kent Hoover
