“This year, and next year, are going to be banner years for supply growth,” writes Calanog. “While we expect renter demand to continue to remain robust, we are predicting vacancies to rise given the amount of new projects that are coming on line.”

He adds that the steep drop-off in supply growth expected for 2019 is “something to be hopeful about. A lot of lenders and sources of finance have in fact pulled back on greenlighting multifamily construction, a process which began last year.”

For projects that have already broken ground, “the train has left the station,” Calanog writes. “The next 18 months will represent “a time of reckoning for markets like New York, where it is expected that a record number of new properties – over 15,000 units, not counting condos and townhomes – will come on line,” he adds. Fitch cites New York, as well as Nashville, Denver and Washington, DC as markets to watch given a concentration of new supply.

Green Street Advisors' Cedrik Lachance came away from Nareit's REITWorld conference last week with a muted 2018 outlook for apartment REITs—a view derived largely from meetings with the investment trusts' senior executives. Initial rent growth guidance for next year from Mid-America Apartments and discussions with other management teams at REITWorld “indicate general agreement with our outlook for decelerating revenue growth in '18,” he writes in a report recapping Green Street analysts' takeaways from the three-day conference.

At REITWorld, “Management teams seemed intent to set a somewhat cautious tone and rein in any expectations for a top-line reacceleration in '18, which is a notable shift in tone from earlier in '17,” Lachance writes. He adds, though, that “executives are confident that even if new lease rent growth remains weak, steady renewal lease pricing power will support revenue growth to a degree, as the inertia associated with moving continues to surprise favorably. We continue to expect low-2% top line growth next year for apartment REITs.”