Jay Parsons, the Chief Economist at RealPage recently analyzed the glut in apartment construction. The reason is pretty clear. Multifamily has seen the largest wave of construction this year since 1970.
Multiple sources have told GlobeSt.com since early this year of their concerns that increased unit inventory could put significant downward pressure on rents as the newer buildings were trying to lease up and might well use a pricing strategy to do so because the landlords might not have other choices. Better to make less money than to lose it.
That helps explain why multifamily developers and investors need to understand where the biggest gluts, and their potential negative impact, might be. And where pricing power might be stronger in the face of less competition.
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