A look at Biden’s first week in office

This episode reviews last week’s inauguration of President Joe Biden, examining which housing issues the new administration has already taken action on.

Mortgage Tech Demo Day

Tune in to our live Virtual Demo Day on February 2nd to experience demos from the most innovative loan origination and valuation tech companies in the industry.

If consumers aren’t holding lenders back, then who or what is?

The challenge for lenders and investors is understanding how to meet borrowers where they are without layering on risk or getting bogged down in third-party intermediation.

HomeBridge’s Brian White on diversity at a practical level

HomeBridge's Brian “Woody” White discusses ways to increase diversity within the housing finance industry.

Real Estate

Here’s what will happen in multifamily real estate in 2020

What will renters see next year?

After a strong year in multifamily housing, expect an even stronger one in 2020, according to RealPage Chief Economist Greg Willett.

In an interview with HousingWire, Willett said the apartment market is in great shape, and even the luxury market will see competition in 2020.

Occupancy rates were as high as 96.3% this year, a figure Willett said is well above the long-term norm.

And much of the new properties set to hit the market next year will be of the higher-end variety. According to Willett, about 75% to 80% of 2020’s additions will command luxury product rents, leading to increased competition in that market segment.

“Increasing completions point to a competitive leasing environment for luxury product in 2020. About 550,000 market-rate apartments are under construction right now. Approximately 366,000 of them are scheduled to finish in 2020,” Willett said. “That targeted delivery volume jumps sharply from 2019 completions of around 279,000 units.”

As for moderately-priced products, the market will remain tighter. Since starter homes are few and far between, and Baby Boomers want to age in place in their homes, many younger people are left with no choice but to rent.

And that’s leading to tight supply in the moderately-priced apartment market.

YardiMatrix recently revealed that 320,000 multifamily units were rented in 2019, leaving occupancy rates slim.

“While there’s not much middle-market product on the way, there will be a few additions in outlying areas of big metros, basically areas where lower land costs allow the delivery of some projects with lower rents,” Willett said.

“Likewise, middle-market product will come in secondary and tertiary markets where it’s still feasible to build lower-cost, garden-style properties with surface parking,” Willett continued. “The limited deliveries of Class B and C projects in most places point to continued sky-high occupancy and solid rent growth.”

Willett said that since the competition remains so high for multifamily housing and occupancy, consumers should expect pricing to stay high, and cap rates to stay low.

However, rent control remains a wild card for investment in some markets. This year, California and Oregon were the first states in the U.S. to enact state wide rent control.

“While it’s unlikely that owners in markets with rent control will look to sell off significant numbers of assets, some investors appear hesitant to deploy additional capital in those areas,” Willett said.

Most Popular Articles

Zillow: Expect another record year for home sales

Zillow predicts 6.82 million existing home sales in 2021, the most recorded in a single calendar year since 2005 and a 21.1% increase from 2020.

Jan 25, 2021 By

Latest Articles

The Fed plots a slow, stable path on mortgage rates

The FOMC left future economic policies virtually unchanged at its Wednesday meeting, indicating plans that short-term mortgage rates will stay low for years to come.

Jan 27, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please