In 2008, the leading market for multifamily construction was New York, which experienced a relatively modest 6 percent drop in the number of dwelling units started from the previous year. This compares to more severe 2008 declines in such markets as Washington, D.C. (down 23 percent), Atlanta (down 24 percent), Los Angeles (down 40 percent), Las Vegas (down 61 percent), Miami (down 60 percent), and Chicago (down 62 percent). In 2009, the New York market will see greater retrenchment, affected by the upheaval in its financial sector and declines in financial services jobs. For the U.S. as a whole, the tight lending environment will restrain development of both apartments and condominiums. It is expected that secondary markets will see a more moderate retreat this year, and public housing projects may be lifted by funding from the stimulus package.
Commercial building in 2009 is forecast to decline 21 percent in dollars and 26 percent in square feet. This is on top of what took place during 2008—down 17 percent in dollars and 27 percent in square feet. The extent of the 2009 slide will depend on the effectiveness of new efforts to help the banking system regain its footing, including returning to the original premise of the bailout bill in which troubled mortgage-backed assets are removed from bank portfolios. It is not expected that the stimulus package will provide immediate benefit to the commercial sector, although gains in employment and a more moderate recession will be a plus in a year or so.
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