Apartment Construction

Apartment Market Post Covid19

New reports show that rental units accounted for 96% of multifamily construction starts during the second quarter of 2020, which took additional market share from the condo market.

According to The National Association of Home Builders, quarterly data from the Census Bureau, noted that 76,000 rental multifamily started and with only 3,000 condo starts.

By comparison, apartment starts have been about 90% or higher since late 2014. Apartment starts hit the bottom in Q3 2005, when condo construction was booming. During that time, apartment construction hit 47%.

Rental multifamily starts traditionally have held more market share over condos. From 1980-2002, the average market share for apartments was 80%, according to NAHB.

While more apartments are going up, their square footage is staying down, according to NAHB. The average square footage of rental units during the second quarter of this year was 1,126, well below the pre-Great Recession peak of about 1,300. In early 2015, square footage reached a post-recession peak of 1,247 square feet.

Depressed dwelling sizes may not last long, according to NAHB, particularly in light of the new work from home trend.

Though apartments took more market share from condos, new construction has been reduced by 12% this year due to Covid19, according to RentCafe Blog. “The downtrend is mainly due to the slower pace of construction, as a result of a shortage of available construction crews, funding and permits, along with some temporary bans on construction projects in certain states,” the report said.

However, housing construction overall has been driving up lumber prices according to NAHB.  The price of lumber has shot up 110% since mid-April. It is estimates that these recent gains have boosted typical new single-family home prices and apartment prices by approximately $14,000 and $5,000, respectively.

Pricing of multifamily has so far, not been too affected by COVID-19. At least it hasn’t caught up to it yet.

covid-19

COVID-19 Update

Most of the Cities and Counties of our residence issued an emergency order directing people to “Stay Home, Work Safe” due to the COVID-19 coronavirus. And this order will remain in effect until it is rescinded by your individual City or County.

Under the order, people within the counties are asked not to leave their residence except to perform “essential travel.” Some reasons for essential travel include:

• To engage in activities or perform tasks essential to their health and safety, or to the health and safety of their family or household members (for example, obtaining medical supplies or medication, visiting a healthcare professional, or obtaining supplies needed to work from home).

• To obtain necessary services or supplies for themselves and their family or household members, or to deliver those services or supplies to others (for example, food, pet supplies, and any other household consumer products, supplies needed to work from home, and products necessary to maintain the safety, sanitation, and essential operation of residences). 

• To engage in outdoor activity, provided the individuals comply with social distancing requirements of six feet (for example, walking, biking, hiking, running, or fishing).

• To perform work providing essential products and services at an Essential Business or to otherwise carry out activities specifically permitted in this Order.

• To care for a family member or pet in another household.

We continue to follow our increased disinfecting process and constant monitoring of the latest from federal, state, and local officials; our policies are consistent with the Centers for Disease Control and Prevention (CDC). Please review the preventive measures from their website https://www.cdc.gov/coronavirus/2019-ncov/prepare/prevention.html.  

Please know that the safety, security, and well-being of all of our residents and employees are our number one priority. 

We are currently working on a modified schedule for our operations for the time being and will alert you once that has changed. For now, all resident clubhouses, pools, fitness centers, and business centers will remain closed until further notice. 

If you have any questions or concerns, please do not hesitate to let us know and more importantly, please stay safe!