Unlike the last growth cycle, the present one has seen demand outstrip the new supply, according to Marcus & Millichap.
CHICAGO—Investors have worried for some time that the remarkable boom in multifamily construction is on the verge of reaching a plateau. But even though the pace of new construction has been faster than ever, the tenants keep showing up. And according to a new mid-year report on the national market from Marcus & Millichap, not only should strong absorption continue this year, but the changing demographics of the upcoming millennial generation will create long-term demand that may soften the eventual downturn.
The company forecasts that developers will finish just over 300,000 units this year, a major jump from the 85,000 done in 2011, the market's low point. A big number like that tends to cause concern “because cranes and wood framing for new complexes are visible to investors while demand is not.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
