Orlando, Fla. -- Perhaps the second half of the seminar title said it all: “How long can the good times last?” A large group of skittish apartment and condo builders attended the multi-family forecast of David Crowe, the chief economist of the National Association of Home Builders (NAHB), here on the second day of the International Builders' Show. What they hoped to hear was that the high demand for rental units will continue to fuel multi-family starts, which continue to outpace single family starts.
“Even the condo -- the lower indicator -- has shown some expectations for the future,” Crowe said. “But you’ve gotten to a new [low-vacancy] level for a while now.”
Ron Witten of Witten Advisors, a consulting firm to owners of apartment complexes and multi-family developers, said it was a misconception that people from foreclosed homes are moving into apartments and rented condos. The increase in occupancy levels can be attributed mostly to rented houses, he said.
“The growth has not come from a flight from foreclosed homes but the arrival of this echo boom generation and their ability to get jobs,” Witten explained.
Both men agreed that the health of the multi-family housing industry is tied directly to job growth more than any other factor.
On the single-family home front, a panel that included Paul Hylbert of Kodiak Building Partners in addition to Kermit Baker and Kent Colton, both from the Harvard Joint Center for Housing Studies, discussed the latter two’s new book called “Bigger isn’t necessarily better: Lessons from the Harvard Home Building Study.” The authors polled 78 large production builders in 2003 to analyze whether they used best practices such as using pre-assembled components, installed sales, information technology and supply chain collaboration. The answers give a peek into the homebuilding industry at its peak production but not necessarily its peak performance.
The International Builders' Show, sponsored by the NAHB, concludes today after Federal Reserve chairman Ben Bernanke addresses the NAHB board of directors in a special session.