- Tom Silva
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Condos Big and Tall
According to the April 1, 2008, issue of Commercial Property News, there are five prime reasons why developers should continue building condominiums and apartments. Why is this happening in the multi-family market considering the fast pace of single-family home foreclosures? Strong echo and baby boomer demand – 7 million echo boomers are starting their careers and want to live somewhere affordable, where they can build equity to ultimately buy a house.
Multi-family’s status as an investor-safe haven.
Security, thanks to Fannie and Freddie – Fannie Mae and Freddie Mac are crucial backstops for multi-family financing. Because multi-family is the only property type that has this protection, Fannie and Freddie are all-important to apartment investors, whether large or small.
The national need for affordable housing – As an example, Governor Jon Corzine of New Jersey recently launched an initiative to spur the development of 100,000 affordable housing units in the state over the next 10 years.
Urban-renewal initiatives – Many older United States cities are encouraging multi-family development – both new construction and repurposing of older buildings — to revitalize their downtown’s.
According to Commercial Property News, condo completions this year are likely to overshadow 2007’s deliveries by more than 56,000 units. The 2008 projection, totaling nearly 250,000 units nationally, would represent a three-year high.