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Are Multifamily's Best Days In the Past?

Are Multifamily's Best Days In the Past?
With the way that the real estate markets have fluctuated over the last decade - from strong and steady to a full-blown recession - it’s no wonder that some multifamily investors and other industry professionals have undoubtedly asked themselves, “Are our best days behind us?” The short answer? No way. Here’s why… Across the country vacancy rates are steadily decreasing, rental rates are on the rise, and new construction is breaking ground at an impressive rate. Looking at the Marcus & Millichap’s 2014 National Apartment Overview, we see that national vacancy rates for multifamily sector are expected to reach 5.1% in 2014 mostly because of the 215,000 new multifamily units under construction this year. In addition, the reports project that rental rates will increase by another 2.6% over the 4.2% we saw in 2013. From Seattle to Miami and San Diego to Colorado, the multifamily markets are booming as an aging demographic is moving from single family units into easier-to-maintain multifamily units and a coming-of-age demographic is branching out on its own for the first time. According to the experts, we shouldn’t look for the multifamily market to slow down anytime soon. As a matter of fact, these experts feel that when the time comes we will see a “tapering off” when interest rates begin to rise, but that shouldn't happen anytime within the next 3-5 years. Described as a “feeding frenzy”, both developers and commercial lenders seem to share the experts’ opinion, citing that a large percentage of their investments and partners still regard multifamily as a valued and necessary part of t......
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