04 Mar Multifamily Real Estate Sector Expected to Have Banner 2013
According to Fannie Mae and the National Association of Home Builders, the multifamily real estate sector is expected to have a banner 2013. Vacancy rates and higher rents continue to permeate the landscape, which has given both groups cause to believe that the multifamily housing sector is poised for growth this year.
Fannie Mae says that asking rental rates are expected to climb 2.5% this year, while vacancy rates should increase to 6%. The improvement in this sector is expected to benefit the overall real estate recovery that still continues to take shape.
Both Fannie Mae and the NAHB say that a boom in multifamily housing is expected, and after years of stagnation, new construction will also come to fruition. In general, experts are calling for a balanced multifamily market without the peaks and valleys of previous years. Of course, as is the case with any recovery, there will still be some hurdles to overcome, including the lack of available capital that has given developers around the country pause.
In 2012, the multifamily sector vacancy rate was 5.5% in the fourth quarter, falling into the low end of historical data. Couple that with rent growth that exceeded Fannie Mae’s projection of 3%, and there’s reason to agree that the multifamily housing sector will continue to make strides in 2013.