We see construction slowing down and developers possibly pulling back a little in certain markets where supply outpaced demand. However, in most markets in which we operate, we see the high occupancies and absorption of units that we saw a year ago. We have not seen a lot of softness because developers have slowed the speed of development to keep pace with demand. We've seen a lot of discipline in the markets. Markets that continue to be strong include South Florida, from Palm Beach to Miami, northern New Jersey, Philadelphia and most urban centers including Washington, D.C. and in-town Atlanta, says Slocum.
Some slowdown is observed in markets including suburban Atlanta and Orlando.
Interest rates for construction financing are at historical lows, notes Slocum. However, Slocum foresees interest rates for construction loans may increase slightly over the next 12 to 24 months as some lenders back off from short-term lending thus reducing the competitiveness for loans. Like the steadfast hometown bank, First Union operates on the principal of reliability. Our strategy is to be a consistent, reliable lender to the multifamily industry. Our approach and underwriting standards remain consistent through the real estate cycle.