Apartment Deliveries Should Tail Off in 2018
Digested from National Real Estate Investor
With deliveries expected to fall, the climate should remain solid for apartment owners, especially those in the suburbs. But single-family housing could create competition.
In 2017, apartment developers delivered a large number of new apartment homes, but occupancy remained high. Those deliveries should start to slide a bit, according to National Real Estate Investor’s Bendix Anderson.
Competition could come from other places.
“For-sale homes may put a little more pressure on the apartment sector in 2018, but demand is expected to continue to grow as the economy expands, keeping occupancy rates high,” Anderson writes. “The new tax framework may steer more people away from purchasing homes as certain tax benefits of home ownership are eliminated.”
Some areas will continue to see pricing pressure caused by new supply, particularly those metros that have seen an influx of luxury apartments. Because of that, demand figures to be strongest in the suburbs.
“The strongest markets may be those that are located close enough to the growing core cities to benefit from strong demand for apartments without suffering from competition from new construction,” Anderson writes.
