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NEW YORK CITY-A bump in the number of multifamily building permits issued and holes dug last month are not enough to throw off the currently congenial ratio of supply and demand, a Lehman Brothers REIT analyst tells GlobeSt.com.

The markets basically are in equilibrium,” analyst David Harris tells GlobeSt.com. “Despite a blip up in July, we still believe the multifamily sector is in balance with regard to demand and supply.”

July housing starts for multifamily buildings of five or more units jumped 14.4% over June, from 291,000 to 333,000 units. Building permits for the same period rose from 284,000 to 293,000 units. According to Harris, while the numbers may sound significant, they still fall within analysts’ comfort levels.

“We think that demand in the marketplace is running between 310,000 and 340,000 [housing starts per month]” Harris says. “ If we see starts running below that number we’re not worried about excess supply and we should expect that rents would remain on a positive trend.”

The thought of oversupply in the real estate market is enough to sends shivers throughout the industry as brokers recall the massive overbuilding of the late 1980s and the deep recession that followed. According to Harris, the lessons learned then are paying off today.

“The high level of supply troughed out in the late ’90s,” Harris says. “Supply and demand have been remarkably stable from the mid-’90s to the current time.”

Technology and capital markets centers are seeing more softening of rents than other areas because of the now-ubiquitous tech crash and “some concern about income levels in the capital markets industry,” Harris says. “People are expecting in many cases that their incomes will be less on a forward basis than they have in recent years. We can expect capital market companies to hire fewer people, which will then have a negative affect on demand levels in the market. “

San Francisco, Harris says, “where demand is clearly under stress as a result of what’s happening in the tech industry,” has seen rents drop up to 5% from last September’s highs. New York, he says, has seen a similar effect.

However, the three-month average for starts, currently 307,000 units, remains below Lehman Brothers’ comfort levels, as does the three-month average for permits, which stands at 309,000 units.

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