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But a growing fraction of U.S. apartments—especially luxury—have been left unoccupied for longer stretches of time, real estate research firm CoStar revealed in a report Monday, as developers continue to build housing in the cities instead of the suburbs—injecting more risk into the economy.
These developers are mostly merchant builders, developers that aren’t personally invested in the project but are using investors’ or loaned funds. In the event of a recession, these merchant builders would give the real estate to the bank immediately, since the value of the housing would fall—driving down profits.
http://fortune.com/2016/08/16/recession-risk-luxury-apartments/