Why Multi Family is so Strong

yourpropertypath.com is a real estate information resource on the web. We are all aware of the disaster developing as a result of the real estate correction. Its not only painful for the foreclosed and the speculators. Many of these recent buyers were just looking at their piece of the American pie. They never really thought of themselves as speculators or risk takers, just grabbing an opportunity and trying to get in under the wire.

These folks, the lenders and the banks that provided the liquidity are now feeling the pain of a reversal of fortune. Many of the paper investors, hedge funds and Wall Street firms are now accepting foreign aid (in the form of new partners) to stay afloat and weather the latest storm. It always amazes me that the watchdogs and safety features built into markets seem to dissolve periodically and big time.

But the multi family market is holding up quite well. Owners of rental units and the property managers they hire are smiling and here's why...

The national Real Estate Investor has an excellent article on the good fortunes of rental property, perhaps the only good market sector today.

Supply:
The boom created a hot market for TIC and condo conversion. This created a dearth of supply of rental units as they were taken off the market and owners that sold or converted their rental property during these heady times did quite well.

Higher Land Prices:
The boom also created a land buying frenzy that increased prices. According to via the National Real Estate Investor: "insights from members of NAHB's Multifamily Leadership Board suggest that developers of rental apartments were virtually shut out by the deep pockets of publicly traded home builders and condo developers at the peak of the housing boom."

Cost of Construction:
No doubt China has something to do with this. The cost of building materials like copper and concrete have been increasing for many years as boom builders such as China buy up construction materials worldwide. The cost of land plus the cost of construction kept multi family new building in check.

Thanks for Reading
Howard Bell
www.yourpropertypath.com