Employment Growth to Drive Multifamily Completions in 2014
2/24/2014 3:52 PM
Robust job growth in some areas of the country has fueled multifamily completions in the past and are expected to continue to do so into 2014. Relatively high correlation between job growth and multifamily completions indicate a strong relationship that feeds the growing demand for housing in these areas. These urban areas are largely developed and there is limited room for single family development. As more people funnel into these regions of high growth, absorbed is increased, vacancies dive while rent rates rise, creating attractive opportunities for multifamily developers.
In addition to the effects of supply and demand or in this case, demand and supply, there are other factors in play. Baby Boomers are trading in their front door keys for apartment fobs at a rate never seen before. The ease and convenience of apartment living has drawn many Boomers to the city centers. Additionally, the availability of new jobs and industries tends to drive Millennials from committing to home ownership and rather, to apartment living, also at rates not seen in recent memory. This acts to further ratchet demand for apartment living in these areas. All of this being said, job growth(or loss) is the largest catalyst for the constantly changing barometer of the real estate markets as investors, renters, and owners vie for the balance that maximizes the net value for each.