I have been focused on lending for builders and new construction for 15 years. Regulation and fees now amount to 40% of the cost to build in San Diego. It is going to be easier to sell existing homes as the cost to build new ones is getting out of hand.
New homes aren’t being built, and construction and development lending trends may be to blame, according to Kroll Bond Rating Agency’s Christopher Whalen.
Regulations have changed the equation for banks when it comes to where they focus their C&D lending activity. And because of the fundamentals underpinning the markets for single-family homes versus other sectors, a significant portion of today’s C&D lending is going to multifamily developments instead, Whalen argued in a research note.
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