Housing demand is high and so is multifamily construction. In an effort to meet the demand, more apartments are being built across the country, but is it sustainable and can it remain affordable? Here's a quick take from National Real Estate Investor.
Despite concerns about potentially slowing economic growth and new rent control laws around the country, investors continue to go after apartment properties.
The volume of U.S. multifamily acquisitions in the first nine months of 2019 was higher than during any other comparable period since this expansion cycle began a decade ago. In fact, this year might set a record for multifamily sales volume, says Alexis Maltin, manager of analytics with New York City-based research firm Real Capital Analytics (RCA). Investors spent $130.6 billion on multifamily acquisitions in the first three quarters of 2019, according to RCA.
Investors continue to be drawn to multifamily properties because of strong demand that has kept rents growing and occupancy levels well above 90 percent.
“From a fundamentals demand perspective… there is still a lot of race left in the apartment markets,” says Chicago-based Brian McAuliffe, president of CBRE Capital Markets.
Developers have been unable to build enough new units of housing to match the growing number of new households. “The reason why fundamentals are so strong is that we have a housing crisis,” says John Sebree, director of the national multi housing group with brokerage firm Marcus & Millichap.
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