Construction of both homes and apartments is climbing, giving housing experts hope that the sagging market finally may be on the rise.
Single-family home construction rose by 2.3 percent in November, according to the Commerce Department, but the more pronounced climb in construction came from apartments, which jumped by 32 percent in the last month.
The latest construction figures add to a growing trend — requests for permits to build apartments with five or more units have spiked 80 percent in 2011, while permit requests to build single-family homes have lagged, rising just 3.6 percent.
Local housing experts say the new figures lend hope that the market may have finally reached rock bottom and has turned course toward a recovery.
“Whatever measure you want to look at, real estate is making a small-scale recovery,” said Richard Clinch, professor of economic development at the University of Baltimore.
But the surge in the rental market may create a glut of apartments in the Washington region, as even more construction is expected in the coming years.
Widespread construction of new apartments has the potential to overwhelm the area with too many rental options, according to John Kortecamp, spokesman for the Maryland Home Builders Association.
“I think we’re going to see an oversupply of the rental market as soon as the traditional market [new home sales] starts to move,” Kortecamp said. “We’re looking at a bulge in the rental market, just as we saw a bulge in the market for single-family homes in 2007.”
But rental demand is high as families struggle to secure mortgages and a new generation of recent college graduates finally move out on their own, Kortecamp said.
During the recession, many condominiums in the region were converted to rentals, said Boyd Campbell, a real estate agent in Prince George’s County.
“If you couple that with the new construction, there is a possibility we could create a glut,” Campbell said. “But I say that very cautiously because we don’t know what kind of growth we’re going to have here in the Washington region.”
Campbell also said the region has a tendency to absorb new housing quickly — as soon as new apartments are built, they quickly fill up.
