Multifamily Investing News: 2012 Could Be a Strong Year for Multifamily Sales

Excellent news for people getting started in multifamily investing!  Homebuilders are encouraged that the industry will see a turnaround in 2012 for the construction of new multifamily housing units, and possibly also a turn in the construction of new single-family homes.

Capital Economics expects about 850,000 new rental households to be formed each year for the next several years. Starts for the month in multifamily construction rose for the fifth month in a row.  Last year multifamily added 177,000 new units.

Capital Economics analysts said, “We think that growing investment demand will prompt homebuilders to increase significantly construction of multifamily units in 2012. But in a turnaround from last year’s performance, we also expect single-family starts to increase this year.”  The prediction is that multifamily housing starts will increase by as much as 50% this year, or 270,000 units.

At the same time single-family housing starts declined by 9% in 2011. The decline in the single family new home sector is expected to ease this year on better news in the housing market and pent up demand.  However, if foreclosures are significantly increased this year then bets are off on needing new housing to cover the demand in the single family market.