Thursday, October 31, 2013

Top Execs: What is the Biggest Threat to Multifamily's Momentum? via Multifamily Executive Magazine

“As always, we have to be careful about overbuilding. In addition, I am also concerned that while the economy is recovering, rents are rising higher than salaries, and that newer product will be priced above what people can afford. This also translates into the prices investors are paying for multifamily. In order to meet their returns at the prices they are paying for communities, rents will need to continue to grow at a healthy pace. If incomes don’t increase to meet the rent increases, we could see challenges in the market.”
Cindy Clare, CEO, Kettler Management

“There are several threats to the very positive market conditions. The first, and most obvious, is overbuilding. While many are concerned about overbuilding, the level of new starts is actually at our 10- to 15-year normal rate of delivery. The key to absorption is jobs. In markets like Seattle, Austin, and Houston, there’s been substantial job growth to support new starts. The second “buzz kill” could be rising interest rates. This, coupled with the impending restructuring of the agency lenders, could slow investor interest in the sector. However, it could also slow the growing return of renters to single-family homeownership.

Read more...Top Execs: What is the Biggest Threat to Multifamily's Momentum? - Multifamily Executive Magazine

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