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Apartment Demand Will Remain Strong Enough to Absorb New Supply

Apartment New Supply

Digested from “Why New Apartment Projects Still Make Sense”
National Real Estate Investor (12/28/15) Anderson, Bendix

Given the market’s historically strong performance, apartment rent growth will continue into 2017. But experts estimate that vacancy rates could reach 5 percent as supply begins to outpace demand.

With millennials looking toward homeownership as they continue to age and start their families, demand will begin to diminish. The greatest development opportunities will come from the suburbs, which not only will be in higher demand but also have seen less development than central business districts. Job growth in suburb markets is also a plus.

In 2017, supply will remain low enough for rent to keep growing at a faster rate than inflation, so developers should continue to look for purchase opportunities — especially those beyond city boundaries.

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