Everything seems to be going right for the apartment industry. Demand is growing. New supply remains constrained. Rents are rising a little faster than overall inflation. Occupancy rates have rebounded to normal levels in most markets. Real estate investors still find apartments an attractive asset class and financing is mostly available. For the next few years, most analysts foresee rising rents, higher net operating income, modest price gains, available capital and an active transactions market. Is it all too good to be true?
Despite the current optimism, some potential challenges lurk on the horizon. Rent growth is one. While today’s rent increases are great for apartment firms that are recovering from recessionary rent declines, they are creating affordability concerns as rent growth outpaces resident income growth. Competition in the single-family market is another issue. Distress in the single-family, for-sale segment of the market has turned the rent-versus-buy value proposition on its head in some markets and created opportunities for investment and growth in the single-family rental market.
Read more...Is Multifamily's Meteoric Growth Built to Last?
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.