From Marcus & MIlliap's Review Report on Multi-Family - === Extended Growth Cycle…
Original publication date on the United States Real Estate Forum on Facebook:
2019-02-02T08:00:30+0000
From the Marcus & MIlliap Review Report on Multi-Family -
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The expanded growth cycle, which is approaching ten years this year, has led investors in multi-apartment apartments to a variety of unique opportunities. There was fear of flooding in the market, but the demand was barely met.
Average rents have risen nearly 50 percent over the past decade, while average vacancy rates have tightened dramatically.
Class C apartments generated their highest performance gains in today's history, while secondary and tertiary markets enjoyed a long growth cycle.
But investors should look ahead carefully and ask "How long can this fantastic momentum last?"
Last year, the tax reform raised the level of the economy and the level of demand, and stimulated a positive demand for apartments and supported the absorption of stunning apartments, which reached its peak in the last 25 years. Looking ahead, labor shortages will slow job creation, but will also favor housing over apartments as a labor force participation weight. Millennials will be a driving force, with 67 million young people between the ages of 20 and 34 having the opportunity to move out on their own. Along with the rise in house prices and mortgage rates, new tax rules have been added that reduce the benefits of homeownership, at the same time as reducing homebuying for the first time.
This combination bodes well for demand for residential apartment in 2019.
Cap rates have remained relatively stable in recent years, but the 10-year bond yield gap has tightened and reduced investors' ability to generate positive leverage. In the absence of higher returns, investors will continue to pursue properties in suburban locations in primary and secondary and tertiary markets, thus increasing capital liquidity for these areas.
Many of the unknown are waiting for investors in the coming year, as a slowdown in international economies joins the volatility of the financial market and the tightening or reverse yield curve to weigh investors' optimism. However, the strength of the employment market and positive demographic practices reinforce the demand for multi-family housing.
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No doubt very interesting, and later we will bring more fascinating information about the multi-family expected 2019
Link to the original post on the United States Real Estate Forum on Facebook - Works on a desktop computer:
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Thank you ??
Excellent review Ido. It seems like a newcomer has translated it (I guess they're calling the new Google immigrant). thanks for sharing.
Excellent review… Only… It is worth remembering that this is a body that lives on transactions and commercial real estate financing… There are other non-broker research bodies that are worth getting to know ..
Thanks for the review, agrees, beyond the fact that this is a very powerful body and is considered accurate in its reviews
I attached a photo to the post - for re-editing
very interesting. Please link to original report?
Excellent summary. I have no doubt that due to the current conditions in the housing market (the stage where we are in the real estate cycle) multi-family along with investing in mortgages / debt are the preferred options for investing.