Multi-family Still Rising
Many analysts and industry experts wondered if multi-family would start to slow down in 2014. After all, the sector has enjoyed almost six years of continuous improvement. However, early results for the first quarter have analysts predicting continued strong performance for multi-family investments for years to come.
The multi-family vacancy rate dropped to 4% in the first quarter – improving from previous historical lows in the third and fourth quarters of 2013. Meanwhile rents rose 0.6% in the first quarter – up 3.2% from the previous year and 13% since the up-cycle began in 2009.
Market fundamentals remain strong:
· 75% of 25-34 year olds had jobs in February (the pre-recession high was 80%)
· Despite lots of new development, demand still outstrips supply
· The cost of home buying has increased – median monthly home payment for a new home rose 20% within the past year
With no apparent end in sight, investors will continue to look for multifamily investments. Industry experts expect lots of interest in secondary and tertiary markets this year, particularly within the Sun Belt. THE CABOT GROUP has over 40 years of success operating in such markets and looks forward to many more as the multi-family sector continues to shine.