The U.S. Census Bureau and HUD announced last week that housing starts
took a dip in the month of June, an unexpected turn of events as the housingmarket saw a boost in production in previous months. The report comes at a
time when instability in the economy is rampant, and disappointing numbers
are cutting down hopes of a sustained economic turnaround in the U.S. Growth
appears to be stalled as recent economic reports have failed to meet
expectations, discouraging economists from maintaining an optimistic
outlook.
"The disappointing numbers from June aren't necessarily indicative of what's
to come for the multi-family housing market," says Al Goldstein, President
of Pangea Properties. "Just as in the stock market, one month's numbers
don't always reflect the big picture, and if anything it shows that the
fluctuation from month to month is a sign of volatility in the market. Based
on that instability we can't call this a full recovery, just yet, because of
the fragility of the market."
Goldstein continues to explain how the false signs of recovery, along with
low yields in the capital markets, encourage uneducated investors to pour
money into the housing market, creating higher price points that aren't
necessarily in line with property value. Goldstein believes that these
actions create a slippery slope in the housing market and that it could be
detrimental to its stabilization.
"The dip in multi-family construction shows caution in the market and is an
obvious sign that people are uncertain about where this wave of building is
coming from," continues Goldstein. "We're confident in the strength of the
market but cognizant of the signs of instability. At Pangea we are dedicated
to investing in properties by adding long-term value to the buildings we
purchase as well as stabilizing the neighborhoods we move into. We think
those are key ingredients to the success of the housing market, along with a
more gradual progression of building and construction that eliminates the
sharp ups and downs we're seeing now."