The percentage of vacant apartments stayed incredibly low in the first quarter, as cold weather delayed a confrontation between growing supply and growing demand. As a result, says Victor Canalog, chief economist and senior vice president for Reis Inc., “The most die-hard multifamily optimists will have their beliefs tested in the next six months.”
Modular construction, in which buildings are created in a factory, transported on the back of a truck to the site and assembled like giant Lego blocks, has become an increasingly common construction method for apartment developers.
Students are opting for the amenities and services offered at new student housing properties, encouraging developers to add more and more amenities and services to their plans. The latest data on pre-leasing for the fall 2015 school year shows that the newest properties are leasing quickly—and at high rents.
With so many new apartments being built across the country, the cities that have had the most new construction over the past five years show how the next wave of new apartments now under construction might be absorbed.
The student housing business faced declining college enrollment in 2014. At the same time, developers finished more purpose-built student housing properties than ever before. But these new student housing communities leased up very quickly anyway.
Thousands of California multifamily properties may soon become more energy efficient, thanks to new plans there to make Property Assessed Clean Energy (PACE) financing available to affordable housing properties.
Investors are buying fewer single-family homes, according to data firm RealtyTrac’s 2014 U.S. Institutional Investor & Cash Sales Report. However, many investors continue to buy and seem committed to the business of renting out their portfolios of single-family homes.
More renters meant more profits for multifamily REITs, which provided tremendous returns to their investors over the last year. The outlook for REITs is also good, with demand expected to stay strong for the foreseeable future, according to NAREIT, improving demand from investors.