Multifamily houses and rental buildings will lead real estate's recovery, and signs are it could happen before the end of the year.
The real estate market is in limbo with housing construction down 47.3% from last year, as investors and homeowners expect the crippling market to respond to President Obama's $75 billion program aimed at halting home foreclosures. But the question remains: Which pieces of the real estate pie will stay down the longest?
Expect retail properties to continue to lag, alongside metropolitan areas just starting to experience large-scale layoffs. Rebounding fastest should be multi-family rental properties and apartments, in addition to cities that didn't overbuilt to begin with.
Multifamily apartment and rental buildings will rebound most quickly, says Victor Calanog, director of research at New York property research firm Reis. "When firms begin hiring again, these sectors will benefit the quickest," Calanog says. "The sector that won't recover until 2011 to 2012 will be retail properties."
That's a sentiment echoed by Howard Davidowitz, chairman of New York-based retail consulting firm Davidowitz & Associates, who projects that over 200,000 stores will close this year. "I have never seen anything like this," he says. "We are in the worst real estate crisis since the Great Depression. The worst is yet to come."
This article found at: http://www.forbes.com/2009/03/18/real-estate-construction-intelligent-in...