In this video update, Reis Chief Economist and VP of Research Victor Calanog provides an assessment of second quarter 2017 apartment sector (multifamily properties) trends. Highlights include:
- 4.4% vacancy rate is up 10 basis points from the prior quarter, the third consecutive quarterly increase
- YTD 80,000 to 90,000 units have opened their doors, with 100,000 likely once all are accounted for
- On track for 200,000 to 250,000 new units for year, the highest level of new supply since the late 1990s
- Asking and effective rents grew 1.3% and 1.2% in the quarter, respectively
- Asking and effective rents grew 3.5% and 3.1% year over year, (again) respectively
- Projecting higher vacancies but new supply pressure will likely dry up in 2018 to 2019 as financing has dried up of late
- Fundamentals appear strong, but next 12-18 months will represent a bit of a reckoning for multifamily investors with properties in certain neighborhoods and markets