Multifamily and single family performance
Today, housing starts and permit data show that housing starts for single family homes dropped 17.2% nationally and permits dropped 9.9% in May.
Painting a very different picture is data from the multifamily sector which enjoyed a 9.7% rise in permits and a striking 33% in May.
Why would the multifamily sector perform so differently that the single family sector? Three words: tax credit expiration. Although multifamily data typically deviates month to month, no single factor impacted this sector like the single family sector was hit.
Although economists and agents on the ground anticipated a drop in single family performance, mainstream analysts did not predict such a spike in multi-family which over the past few years has suffered at the hands of difficult financing as banks tightened lending.
This summer will continue to produce interesting results in both sectors, but with improving performance in multi-family as an overall economic indicator, real estate may look to begin its recovery in 2010 after all.
CC Licensed image courtesy of Payton Chung via Flickr.com.