Will Building Boom End the Party for Apt. Investors? via CoStar Group

Wave of New Construction Affecting Everything From Rent Concessions to Cap Rates to Where Investors Place Capital.

Apartment developers and investors likely can look forward to enjoying another year or two of high occupancy and pricing power in a strengthening economy. But the music may stop by 2015 when the full brunt from the growing wave of new supply is expected to be felt across U.S. markets.

For now, the good times continue to roll. Multifamily pricing continued to post the strongest results of all product types during the first quarter, though there are signs of a deceleration in apartment fundamentals, mainly as a result of growing new supply, according to the latest CoStar Commercial Repeat Sale Indices (CCRSI).

The multifamily index gain of 0.8% in the first quarter was the best of the four major property types - but a notable decline from its quarterly average of 3.2% over the last two years, according to the CCRSI.

Read more...Will Building Boom End the Party for Apt. Investors? - CoStar Group