On the face of it, the robust demand the apartment industry has enjoyed lately appears somewhat inconsistent with our economy. But, on closer evaluation, the seeming disparity isn’t so clear after all. Mild job growth and favorable demographic trends actually support the recent performance of multifamily, and issued permits, starts, and construction trends all reflect a sizable upward trend. Nonetheless, investors may question how far the sector has moved in the expansion cycle, as well as the impact of new supply and an improving single-family industry on apartment performance.
Supply Factors
In some markets where new supply has been introduced or rising rents have bumped up against an affordability ceiling, mild leasing incentives have crept back into the marketplace. In addition, single-family sector fundamentals now exhibit consistent improvement, offering a competitive housing alternative.
Read more...Nadji: Despite Headwinds, Multifamily Still a Choice Investment - Economic Conditions - Multifamily Executive Magazine
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