Rental units accounted for 96% of apartment building construction in the second quarter, causing condos to continue to decline market share.
The National Association of Home Builders analyzed quarterly data from the Census Bureau, which recorded 76,000 rental multi-family starts and 3,000 condominium starts.
"The construction of condominiums has been weak since the end of the Great Recession," says Robert Dietz's report.
For comparison: since the end of 2014, the start of housing has been around 90% or more. Since then, they have rallied in the lower to mid-1990s, but don't seem to have hit 96% before that, according to an accompanying NAHB table, the report. The graph contains data up to 1990.
The apartment begins in the third quarter of 2005 when condominium construction was booming. At that point it reached 47%.
Rental multi-family launches have traditionally held more market shares than condominiums. From 1980 to 2002 the average market share for apartments was 80% according to the NAHB.
While more apartments are increasing, their area will remain low, according to the NAHB. The average number of square meters of rental units in the second quarter of this year was 1,126 and was thus well below the high before the Great Recession of around 1,300. In early 2015, square footage peaked at 1,247 square feet after the recession.
According to the NAHB, depressed apartment sizes may not last long.
"The size of multi-family units could increase in the coming quarters in response to the market's response to the coronavirus recession," the report said.
Although apartments took more market share from condominiums, Housing construction is down this year. According to the RENTCafe blog, COVID-19 has reduced residential construction by 12%.
"The downward trend is mainly due to slower construction pace due to a lack of available construction teams, funding and permits, as well as some temporary bans on construction projects in certain states," the report said.
Housing construction overall is however Drive up wood pricesSaid NAHB in another report. The price of sawn timber has risen by 110% since mid-April.
"[The Association] estimates these recent gains have increased typical new single-family home and apartment prices by about $ 14,000 and $ 5,000, respectively," the report said.
Pricing of multiple families has not yet was much affected of COVID-19, according to brokers at James Capital Advisors. "You still get pre-COVID scores for a lot of properties, depending on the property and the operation," said Mike Hanassab, senior director at sell-side brokerage. "That is the opposite of perception."