Multi-Housing Starts Fall 42% Since February’s Slight Uptick

By Anuradha Kher, Online News EditorWashington, D.C.–The latest starts figures are out, and multifamily starts for March are down again after a slight uptick seen in February. Starts, which were 119,000 units in January, went up slightly to 202,000 in February and are now down to 116,000, according to the latest report released by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD).This is a 42 percent drop from February 2009 and a 55 percent drop when compared year-on-year. “From the supply side, this is exactly what we wanted,” Tobey Price Hubbard, managing principal at Blackstar Capital Partners, tells MHN. “In fact, I would be concerned if the number was higher than what we had expected. This is very good situation for someone who has supply right now, because they have less to compete with.”“We haven’t seen an increase in demand yet, so it would be concerning if these numbers were higher. Demand has to lead the way. When unemployment and other fundamentals of the economy return to normal and the sky-is-falling outlook goes away, those who do have supply, will do well.”Mark Humphrey’s, CEO of Humphrey’s and Partners Architects, tells MHN, “This is the lowest starts have been since almost 1953. Texas and California individually had more starts than this in previous years. It’s partly due to lack of financing. FHA is the only type that’s really active right now and they aren’t doing the really large deals.”According to the Census Bureau, building permits for multifamily buildings went down from 173,000 units in January to 156,000 units in February and now stand at 132,000 units. “It will take 18 to 24 months till we see some recovery, and I’ll feel more comfortable about this when I see the permit numbers because they are a leading indicator,” says Hubbard.Overall housing starts in March were at a seasonally adjusted annual rate of 510,000 units. This is 10.8 percent below the revised February estimate of 572,000 and is 48.4 percent below the March 2008 rate of 988,000. (Click here to read our coverage of February’s housing starts)