The U.S. apartment market continued to see robust growth in 2013, but investors are keeping a wary eye on looming changes going into 2014, including the impact from rising supply, rising interest rates and the prospects of restructuring the nation’s two biggest government-sponsored enterprises (GSE’s) Fannie Mae and Freddie Mac.
via CRE Industry Faces Dramatic Changes in Multifamily Supply, Financing Environment – CoStar Group.
When supply increases; demand decreases. Buyers should remain sensitive to overpaying for multifamily properties in low cap markets, as the market continues to turn.
WASHINGTON, D.C. – October 22, 2012 With the election only weeks away, many commercial real estate professionals are considering the current state of the market and searching for signs of recovery as they contemplate their final electoral decisions. According to historical data trends from BOMA International’s annual Experience Exchange Report ® EER, while market growth has been slow, income has increased and expenses have dropped, allowing these professionals to rest assured that commercial real estate is recovering and indeed better off now than it was four years ago.
via Is Commercial Real Estate Better Off Now Than Four Years Ago? EER Data Says “Yes We Are” (BOMA).
The apartment market, on the other hand, has seen a lift from current market conditions. “The apartment sector has benefited from the weak housing market,” Grupe says. “Many families have lost their houses through foreclosure, plus with housing prices still weak and falling, it doesn’t give people a lot of confidence that buying a house is a good investment, or that it’s a good time to buy now. All that puts apartment housing in a better light.” And again, as with office space, there has not been a lot of new apartment housing supply in the pipeline, keeping supply tight, and making it possible for apartment owners to raise rents.
via REITs: Looking Sweet on the Balance Sheet – On Wall Street.