WASHINGTON, DC-The production of multifamily units, as well as single-family dwellings, will slowly decline by a small percentage in 2006, the National Association of Home Builders has predicted. Economists at the locally based homebuilding organization predict that the solid economy will prevent a plummet in development and that production will gradually decline back to the still-healthy numbers seen in 2004.
"For housing, it will be a systematic simmering down process toward more sustainable levels of sales, production and price appreciation as opposed to a full-blown cyclical contraction," says David Seiders, NAHB chief economist. "Multifamily is doing well, with the condo share of the market up to about 50% at this point.
Construction starts in the multifamily market are expected to go from approximately 354,000 this year to 350,000 next year. "We think multifamily starts will be pretty stable, with condos losing some market share in the year ahead and the rental side regaining some ground," Seiders notes.
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