Outlook for Apartment Sector Looks Strong
February 14, 2017 | by Bendix Anderson | National Real Estate Investor
Since the election, “uncertainty” has been a buzzword among economists. The direction of U.S. policy is not clear on major issues ranging from immigration to tax reform. But the fundamentals of the apartment sector are relatively strong despite it all.
“I hear people talk about ‘uncertainty,’ but when I boil it down to how it will affect the multifamily market, I don’t see any huge change,” says John Sebree, director in the national multi housing group of brokerage firm Marcus & Millichap.
Rents will continue to grow faster than inflation and the average percentage of occupied apartments will continue to be relatively healthy in 2017. Developers will open more apartments than they did last year, but not enough to push the supple demand balance to the breaking point. And the new class-A construction is still concentrated in “core” downtown markets, leaving suburban markets and class-B apartment buildings relatively free from competition.
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