Ronald Reagan said in a famous presidential debate, “There you go again!” and that is the thought on many minds about the emerging apartment market: Are we already overbuilding again? Given the surprisingly rapid recovery in multifamily asset performance and values, clearly a development cycle has begun, more strongly in some markets than in others.
Yet we are far from conditions of “There you go again.” The market data, leading indicators and market experience are actually pointing to the beginning of a development cycle in which demand is accelerating and developers who move quickly will be poised to capture the expansion.
Fears about overly bullish activity, at this point in the cycle, are simply unfounded. We may end up getting to a robust increase leading to oversupply in multifamily supply at some point, but that would take quite some time, plus a full-on expansionary economy, plus a return of easy credit. We are far from that point.
My central conclusion is that we are at the beginning of a multifamily development cycle, and here’s why.
read more...GlobeSt.com - The Myth of the Instant Multifamily Development Boom - Building Opportunity Article
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