Starts of structures with five or more residential units increased by 28.6% in September, compared to the same month a year ago, to a seasonally adjusted annualized rate of 454,000, according to preliminary estimates that the Census Bureau released this morning.
Multifamily starts accounted for 37.6% of total annualized housing starts of 1.206 million, which were up 17.5% in September. However, single-family starts rose by only 12%, meaning that multifamily continues to be the engine powering the housing sector’s ongoing recovery and growth.
Census’s latest estimates would explain rising levels of home builder confidence. NAHB Economics yesterday released its monthly NAHB/Wells Fargo Housing Market Index for October, which at 64 was the highest it’s been since October 2005.
“With firm job creation, economic growth and the release of pent-up demand, we expect housing to keep moving forward as we start to close out 2015,” said David Crowe, chief economist for the National Association of Home Builders.
The big question, then, is how much fuel does multifamily construction have in its tank before it slows down, or before supply reaches equilibrium with demand?
One sign that this might be happening already is evident in Census’s estimates for building permits issued. Year to date, multifamily permits were up in September by 18.6%. However, multifamily permits were actually down 1.3% when compared with September 2014.
In addition, Dodge Data & Analytics notes that the value of multifamily construction fell 30% in September from August. “There were just two projects valued at $100 million or more that reached groundbreaking in September: a $132 million apartment building in New York, N.Y., and a $119 million residential tower in Seattle,” Dodge noted in an October 19 release. “This compares to eight multifamily projects valued at $100 million or more that reached groundbreaking in August, and 16 such projects that were entered as July starts.”
Dodge identified New York, Miami, Los Angeles, Washington D.C., and Boston as the top five metros ranked by the dollar amount of their multifamily starts.
Multifamily completions in September were up 20.4%, compared to a year ago, to 378,000 units, according to Census estimates.
Related Stories
| Aug 11, 2010
Giants 300 Multifamily Report
Multifamily housing starts dropped to 100,000 in April—the lowest level in several decades—due to still-worsening conditions in the apartment market. Nonetheless, the April total is below trend, so starts will move progressively back to a still-depressed 150,000-unit pace by late next year.
| Aug 11, 2010
The softer side of Sears
Built in 1928 as a shining Art Deco beacon for the upper Midwest, the Sears building in Minneapolis—with its 16-story central tower, department store, catalog center, and warehouse—served customers throughout the Twin Cities area for more than 65 years. But as nearby neighborhoods deteriorated and the catalog operation was shut down, by 1994 the once-grand structure was reduced to ...
| Aug 11, 2010
Gold Award: Westin Book Cadillac Hotel & Condominiums Detroit, Mich.
“From eyesore to icon.” That's how Reconstruction Awards judge K. Nam Shiu so concisely described the restoration effort that turned the decimated Book Cadillac Hotel into a modern hotel and condo development. The tallest hotel in the world when it opened in 1924, the 32-story Renaissance Revival structure was revered as a jewel in the then-bustling Motor City.
