Development Industry Coming To An End Due to Rising Construction Costs
How can any ground-up multifamily developer start a project in the next 3-9 months? Rents are not rising as fast as construction prices. The mills are not taking orders for lumber until Q3 22' so no trusses on a job until Q1' 23'? Concrete, steel and gypsum at all-time highs. Limited labor in key trades MEPF, glazing, and roofing. Conclusion...if demand does not continue to grow then property values drop 20%-30%...if demand continues existing inventory will increase in value 15%-20% because it is too expensive to build new. Thoughts?