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The falloffs came fast and hard across the board last year.

In 2007, Hunt Building Co. built 9,366 units of rental housing, landing the El Paso, Texas–based firm squarely in the No. 2 spot on Builder’s sister publication Multifamily Executive’s top 50 multifamily builders list that year. This year, it will take the No. 3 spot, with its 2008 starts plummeting almost 63 percent to 3,476. Lane Co., based in Atlanta, was No. 7 in 2007 with 4,367 units started, but saw a whopping 88 percent drop to 522 in its 2008 unit count. It is now coming in at No. 47. Even the No. 1 multifamily builder in the country—Dallas-based Trammell Crow Residential—saw its starts fall 25 percent from 10,936 units in 2007 to 8,194 last year.

Yes, 2008 was a tough year. All in all, only 15 companies on this year’s list saw their starts go up in 2008. The core of the problem? After the Wall Street meltdown and subsequent stiffening of credit requirements, new lending came to a halt by early fall of 2008. The problem escalated when lenders effectively left developers stranded at the altar—changing terms at the last minute or simply pulling the loan—at the close of 2008, says John A. Schaffer, CFO of Contravest, a Lake Mary, Fla.–based company that started 866 units in 2008, landing it in the No. 38 spot this year.

“A lot of lenders have been out of the game for 60, 90, or 180 days,” Schaffer says. “[Just] when you think everything is fine, they’re getting the word out at the last minute that, as a corporation, they’re pulling the plug on any new financing nationwide.”

But that’s not the only concern. Even if the lending spigots were turned on, apartment developers are still uncertain as to who will live in those new apartments after they open for lease-up. With the continued slowdown in the economy, leasing after new construction is becoming even more difficult.

“We don’t want to start new development at the moment until we have more clarity on the economy,” says David Stockert, president and CEO of Post Properties, whose Atlanta-based REIT saw a drastic falloff in starts, going from 1,131 in 2007 to 147 in 2008. “You’ll have very little supply being produced over the next 12 to 18 months. I’m assuming that in 2009 people will be hunkering down, and maybe you will start to see things loosen up in 2010.”

Learn more about markets featured in this article: Charleston, SC, Dallas, TX.