The MYTH of Surging Construction Costs & Home Prices
Surging Construction Costs in 2021 are being blamed for the Housing Market Mania being experienced in the US. Yet the data tells a very different story.
Surging Construction Costs in 2021 are being blamed for the Housing Market Mania being experienced in the US. Yet the data tells a very different story.
Many pundits try to argue that the US is facing a housing shortage crisis. These people are wrong. In fact, the demographic data says the exact opposite – that there is a shortage in DEMAND for homes.
The US Housing Market is on the precipice of collapse. A unique combination of factors in 2020 led to surge in demand for homes along with a decline in supply. These factors will reverse by late 2021 and the Housing Market will crash.
Multifamily in most markets continues to remain resilient. In particular, affordable markets throughout the Southwest and Midwest are achieving accelerating rent growth even in the midst of a recession.
Luxury apartments are facing stiff headwinds from supply expansion, escalating rental rates, and a fickle tenant base. The current economic recession will exacerbate these issues and lead to valuation haircuts across the space over the next two years.
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