Search
 

Apartments Priced to Perfection

IRVINE, CA—Multifamily pricing has seen 74 consecutive months of double-digit annual growth, but there are reasons to be skeptical that this can continue, writes Chris Muoio of Ten-X Research in this EXCLUSIVE commentary.

By Chris Muoio | Updated on March 21, 2017

Chris Muoio of Ten-X Risks appear to be rising for the apartment sector, writes Chris Muoio.

IRVINE, CA—The apartment sector has enjoyed the strongest and most consistent recovery since the recession. One fallout from the housing bust was a massive decline in homeownership, resulting in a surge in apartment absorption, as people shifted from owning to renting. The surge in demand resulted in plummeting vacancies and surging rents, even as demand in other property segments struggled in the face of the sluggish economic recovery, whetting investor appetite.

Coupled with a steady fall in interest rates, the result has been 74 consecutive months of double-digit annual growth rates in US apartment pricing per the Moody’s CPPI. This has been reflected in cap rates, which continued to fall in the fourth quarter to 5.6%, per Real Capital Analytics data.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.