Multifamily Markets Strengthening In The Shadows

[Josh Oaten]

Many of the markets I am seeing at present are looking extremely strong for multifamily apartments. It is interesting to see that quite a few primary markets (Phoenix, Colorado, Charlotte, Indianapolis) are still seeing stable occupancy rates and growing rents in both Lifestyle and rent by necessity apartment groups. In many cities, I am seeing significant quantity of unit construction starting too take place and housing prices rising extensively. Here is my question - If there is extensive construction in many of the US Primary markets, quickly rising home prices and rent growth, at what point will affordability in both SFH prices and Rents impact the apartment sector in these markets and leave the large construction base bare? Does this growth have a point where people can’t hang anymore? The markets I am reading into having strong growth in both rent and SFH prices giving me the idea that markets may be pushing towards their peaks. In saying this Im extremely interested in finding some Secondary or Tertiary markets that may still be on the turn from rock bottom. I would love to hear your thoughts on secondary and tertiary markets that you are seeing make the turn from the shadows!! Let me know your thoughts on either!