Apartment Rents On the Rise in Q3
Apartment rent rates remain very strong through the end of September nationwide posting a 2.9% increase year over year, according to industry experts. Household formations are predicted to jump 27% in 2019 to 1.53 million from 1.23 million in 2018. Though more housing stock is coming into the market, experts believe that strong demand from these household formations and population increases will absorb the new product.
John Sebree of Marcus and Millichap says, "We are living in a very dull bliss. The fundamentals are very strong."
Greg Willet, Chief Economist of RealPage Inc, a provider of property management software and service concurs, "The apartment market's performance during the 3rd quarter slightly passed expectations.
Although experts tend to agree that the real estate cycle is due for a flattening period in pricing, the risks remain manageable due low debt levels and fixed rate financing. Most banks require 25-35% equity in new deals. New development projects are not receiving the wild financing they received during the Great Recession. Eight year ago a developer could get a loan for 80% of the value of the project, today that loan amount is 65%
It continues to be a great time to invest in multifamily apartments.