Quote:
Originally Posted by Hamilton
Second of all, the rate of construction permits right now is at the lowest since the recession. It seems people are having trouble getting financing, due to a perception of oversupply, whether that's valid or not. Jersey City has had about 850 apartments get construction permits in the past 12 months. For comparison, 1930 apartments got construction permits in the 12 months before that.
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This made me curious. Looking at data from:
http://lwd.dol.state.nj.us/labor/lpa...un/bpann16.htm
Looks like there is a slowdown.
Building Permits for Jersey City in 2014
2,180 Total
1,884 was for multi-family development 5 units or more
Building Permits for Jersey City in 2015
2,658 Total
2,306 for 5+ units
Building Permits for Jersey City in 2016
1,494 Total
1,226 for 5+ units
Building Permits for Jersey City in Jan-April 2017
343 Total
276 for 5+ units
I'm not too worried with lenders being cautious. Say there is a total pool of $1 billion in construction financing for the developers of Jersey City. Developers will need a loan at the start of construction, and banks may be weary of having too much lent out at any one time, but developers refinance their buildings into permanent financing once construction is complete. The construction loan is repaid to the bank and the bank can once again lend it out.
2015 was a peak and where definitely in a trough now. I predict in 2018 we're going to see a strong rebound in construction stats.