The report notes that strong population and employment growth have produced an expanding rental market. "'Rents have risen significantly, thus making it difficult for many to find affordable housing," the report notes.

Local municipality restrictions and a lack of quality sites, as well as the growing sentiment for "smart growth" increasingly hinder the supply of new units. "For these reasons, it is unlikely we will see new multi-housing construction out of control," says Rahe. There are no signs of overbuilding, as in six out of the past nine years, with absorption outpacing new construction.

Rahe especially sees the renovation of class-B and class-C buildings as a growing trend. "Investment firms have been acquiring these properties, spending nine to 12 months on a renovation, then selling to realize a large gain or holding for the long term," according to the report. "In either case, the rental increases have been quite impressive."