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July 21, 2015- We have previously reported how the majority of owners of new condo units in the pencil-towers going up everywhere will be absentee investors not actually using the apartments. Foreigners need safe havens for their cash and U.S. real state is one place for it.
Now, it seems that the demand for condos is falling off, increasing the likelihood that those new pencil-towers will all be empty.
The WSJ reports, “With the housing market in its fourth year of recovery, construction of single-family homes and multifamily rentals is rebounding. Not so for condo construction, which has been slammed by tough rules on condo mortgages enacted after the housing bust as well as stronger demand among young people for rentals and tight lending conditions for builders. In the first quarter, condo construction accounted for just 5.5% of all construction of multifamily housing in the U.S. That was the lowest ratio since the Commerce Department started tracking the figures in 1974, and far below the 24% average.”.