Is the party over? The apartment market has been on an exceptional run for the past four years. A for-sale housing market in tatters, a weak recovery in the labor market that created mostly middling jobs for young workers, and benign supply growth all conspired to create a significant recovery in the apartment sector. However, the landscape is already changing. The for-sale housing market is finally showing some signs of life after a prolonged downturn, but the main risk to multifamily’s good fortune stems from an increase in apartment construction activity rather than single-family competition.
Construction activity has been slowly increasing over the past few years, but that went largely unnoticed due to the strong demand for apartment units. New completions in the top 82 markets in the country averaged just 10,623 units per quarter in 2011 and 19,585 units per quarter in 2012. Over the first three quarters of 2013, however, new completions averaged 27,411 units per quarter.
Read more...New Construction Threatens Multifamily’s Good Run - Multifamily Executive Magazine