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NEW YORK CITY-According to the latest report from Keefe, Bruette & Woods, multifamily project starts have been in a “volatile” state over recent months – but that doesn’t mean murky waters are ahead for the sector. The U.S. Census data in the release reveals that permitting for projects of five or more units have been up “substantially” in May, showing an 18% increase from April of this year.
However, multifamily sequential starts decreased by 24% last month to 179,000 units. The firm notes that average, seasonally adjusted starts figures over the past six months, compared to the same period last year shows an upward trend of eight percent. This does not mean that the most recent figures are positive: the recent average is 18% lower than the 20-year average.
Overall, Keefe, Bruette & Woods have a positive impression of the sector, which provides good news going forward. It is their belief that multifamily starts will continue to increase – a shift prompted by the continued improvements in multifamily fundamentals. Additionally, the firm determined that markets to receive new supply in 2013 include Washington D.C., Seattle, Austin, Raleigh and San Jose. The real boom won’t happen until 2014, potentially, based upon the peak and development cycle experienced in the early 90s.
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