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Condos Are Multi-Unit Properties

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Saturday, 23 August 2014 09:27

Floyd Norris has an interesting piece documenting the surge in construction of multi-family units at the same time that construction of single-family homes remains weak. He attributes this to a weakness in the sales market with more people renting rather than owning.

This conclusion does not necessarily follow from the data. Many multi-family units are built as condos (come to DC and you will see what I mean). The price of condos in many markets has soared in recent years. The five cities for which the Case-Shiller condo index has data show increases in price since January 2012 of 42.1 percent in Los Angeles, 63.5 percent in San Fransisco, 28.7 in Chicago, 22.8 percent in Boston, and 22.1 percent in New York. It is certainly plausible that the rise in construction of multi-family units is an effort by builders to take advantage of this price surge. 

Comments (5)Add Comment
....
written by djb, August 23, 2014 3:22
so for the irrelevant (to the article) but I found evidence of wage increases in a sector indicating lack of unemployed workers!!!!

Headline:

"Wall Street banks dig deeper to keep best and brightest"

"
typos corrected
written by djb, August 23, 2014 3:28
sorry for the irrelevant (to the article) comment but I found evidence of wage increases in a sector indicating lack of qualified workers!!!!

Headline:

"Wall Street banks dig deeper to keep best and brightest"
Bubble?
written by JayR, August 23, 2014 10:43
How did Dean look at the data on price increases in housing, up 42%...63%, and not comment on the housing bubble?
Demographic Shift?
written by Jerome Turner, August 23, 2014 11:21
Well, we have a lot of baby boomers retiring. Seems like condos are a reasonable trade for the large house no longer needed.
...
written by PeonInChief, August 24, 2014 8:10
New multi-family construction is in condos and high-end rentals. In Boston, for instance, there may soon be a glut of high-end rentals, and in LA there are so many of them that a recent housing report indicated that rich renters in LA pay less for rent than rich renters in other cities. (The less rich pay more--LA tenants pay an average of 47% of income for rent.)

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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