ECONOMIC PAIN SPREADS TO MULTIFAMILY HOUSING SECTOR

The National Association of Home Builders (NAHB) is reporting that

The current turmoil in the capital markets is jeopardizing quality rental housing across the country.

This is more bad news for the economy in 2009.

I also noticed that multi-family starts have hovered between 250,000 and 350,000 for more than a decade. A low rate. The current forecast calls for 188,000 multi-family starts in 2009. However, this number is being questioned with the biggest investors of the past—Freddie Mac, Fannie Mae, and large banks—on the sideline.

On a more positive note, this should bode well for owners of rental properties once the economy turns up.

This reminded me of the many articles that were being written in 2006 about how it was much cheaper to rent than own and this was a bad sign for the housing market.

Will the pendulum swing in the other direction in the years ahead? I believe its likely. Time to start looking for ways to exploit the trend.

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