Condo Builders Worried About Market Conditions
Despite increased traffic of prospective buyers, condominium builders and developers are extremely concerned about current conditions in the condo market, according to the latest results of NAHB’s Multifamily Condo Market Index (MCMI). The index lost 14 points in this year’s second quarter, falling to a level of 18, which is 14 points below a year earlier and the lowest level since the index was created five years ago.
"The problems in the mortgage market are rattling consumer confidence in for-sale housing at the same time that the condo sector is trying to shake off excess inventory in a lot of markets," said NAHB Chief Economist David Seiders. "That combination is delaying any recovery in the condo sector."
The index is derived from a quarterly survey of multifamily builders and developers, in which their responses are rated on a scale of 1 to 100, with a rating of 50 generally indicating that the number of positive responses is about the same as the number of negative responses.
According to the index, builders expect no improvement in the condo sector through the end of the year. The component of the index gauging condo builders' expectations for the next six months declined to 26.3 in this year’s second quarter, down from 33.6 a year earlier.
On the positive side, traffic of prospective buyers rose to 36.8, up from 26.8 for the second quarter of 2006.
For more information, e-mail Ann Marie Moriarty at NAHB, or call her at 800-368-5242 x8350.