The reduced demand and increase in supply are causing landlords and property owners to put a pause on rent growth. This means that landlords are not able to raise rent to tackle the losses from the high vacancy rates. Having said that, the economy is gradually stabilizing, with a positive outlook for the rest of 2024. This means that the vacancy rate will come down and occupancy rates will soar with people moving into the newly built homes. Also, the job market will be stabilizing soon, meaning millennials and Gen-Z will be looking for modern housing as they secure jobs in popular areas such as New York, San Francisco, New Jersey, Chicago, Kansas, and Boston.
Future Trends in Multifamily Real Estate
Moderating Rent Growth: With a potential economic slowdown and an increase in new apartment supply, the breakneck pace of rent growth is likely to cool down. Experts at Fannie Mae and ReaPage project rent growth to settle around 1% to 2% in 2024. [Source] 2. Single-family Housing Shortages: The US is also witnessing housing shortages, particularly in single-family homes. This is because Netherlands WhatsApp Number Data homeowners are not motivated to sell their homes due to high-interest rates. This will create a surge in demand for multi-family properties. Additionally, as the economy sees a positive trend, the demand for multifamily units will return, making multifamily properties a better investment opportunity than retail, commercial, or office spaces. 3.
The oversupply of multifamily properties
The current increase in available rental units won’t significantly disrupt the market for long. This is because the construction boom is expected to peak in 2024 and then slow down due to factors like rising construction LOB Directory costs and potential labor shortages. This limits the timeframe of the potential oversupply. Also, even with a temporary rise in vacancies, healthy job markets and population growth are likely to absorb the new units into the market relatively quickly. 4. Financing multifamily properties will be a head-scratcher. Syndicators and real estate professionals looking to fund their multi-family ventures may find themselves in a bit of a pickle trying to finance their deal.
