Condominium demand and starts are declining as rental apartment demand increases to meet shortage caused by conversions in recent years. Beginning in 2003, condo construction and conversions exploded. During the past three years, condo’s have made up a rising share of multifamily housing production. At the same time, thousands of existing rental units have been converted to for-sale units to meet what seemed to be an insatiable appetite for condos. As a result, the supply of rental units is now very tight at a time when the demand pendulum is swinging back to rentals.
Source: Commercial Building Products, Oct 2006 issue.