2014 Banner Year for Apartments
Halfway through the calendar year and 2014 is shaping up to be the best for apartments since the Great Recession. Nationally, apartment occupancy hit 95% for the first time since 2008. Through May, effective rent growth of 3.7% was the highest since 2008 as well. Absorption for new units in urban cores remains high although trends indicate increased supply has started to slow effective rent increases. In suburban markets, effective rent increases continue at a healthy pace as there is little or no new supply to dilute steady demand for rental housing. As of May 2014, the United States had regained the 8.7 million jobs lost during the Great Recession. With the economy in expansion mode, economists predict positive job gains into the next decade. That should translate into steady demand for apartments for several years to come. As such, investors are still very keen on apartment acquisitions while operators continue to enjoy strong performance.