NEW YORK CITY-Though it’s under pressure from a growing shadow market and the return of former homeowners has been less significant than anticipated, the multifamily REIT market is holding up well. That’s what analysts from Fitch Ratings reported during the locally based firm’s 2008 Annual Housing Conference held here last week.The company also examined the single-family housing market, which experts said is exhibiting few positive signs. The most pressing problem for the US economy today is excess supply, said Robert P. Curran, Fitch’s managing director of corporate finance, homebuilders and building materials companies. He added that it looks likely that the housing contraction will extend through 2008.

“A modest recession, declining home prices, tighter mortgage standards, poor buyer psychology and near-record levels of new and existing homes for sale, define the current environment for housing,” he stated. “Should mortgage rates rise or credit terms tighten further, then our housing forecast could turn even more pessimistic.”On the multifamily front, however, the outlook for public companies is stable. That, says Steven Marks, managing director and head of Fitch’s REIT group, is “based on strong trends that have begun to moderate.”

The expectation that the decline in single-family homeownership will significantly benefit multifamily owners, he said, “has thus far been exaggerated. The effects of a slowing economy are weighing more heavily on multifamily fundamentals” than expected.

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