Growing Demographic Helps Fuel Rental Demand
Digested from “Lots of Renters Balance Lots of New Apartments”
National Real Estate Investor (1/20/15) Anderson, Bendix
New data from Reis indictaes that absorption will drop roughly 20,000 to 30,000 units annually for the next few years, especially as a high number of rental units continue to come online for 2015 and 2016.
2014 was a standout year for rental demand, as an above-average number of new units hit the market and were absorbed by demand. Job growth and the burgeoning renter demographic will help fuel demand in coming years, though not at the rates seen in the past 12 months. The increase in new construction will likely raise the vacancy rate, though it should continue to remain under 5 percent.
Overall, there should still be plenty of demand to match the impressive construction rates projected for the next year or two, which are well above industry norms for the previous decade.