Apartment Sector Sustains Positive Outlook
Accelerating household formation, underpinned by the tight U.S. labor market, will continue to support apartment rental demand in 2019, predicts Marcus & Millichap in its 2019 Multifamily Investment Forecast Report. The report points out evolving recruiting practices and shifting demographics will favor a variety of metros, including several smaller cities.
In addition, tax reform and subdued single-family home sales will restrain the national vacancy rate, despite record apartment construction levels. The coming year offers a dynamic climate for investors, according to the Marcus & Millichap report.
Key report findings include:
- Minneapolis-St. Paul climbed two spots to head this year’s National Multifamily Index. It is the only Midwest market to break into the top 20. San Diego also inched up two notches on solid rent growth to claim second place.
- Neighboring Florida metros Orlando (No. 6) and Tampa-St. Petersburg (No. 12) registered the largest advances in this year’s Index, leaping 11 and nine places, respectively.
- As new households are formed next year, much of the rental demand will center on apartments that serve the traditional workforce: Class B and C properties.