A recent report released by Yardi Matrix reveals that the U.S. Multifamily market is continuing to perform well, and has solid projections for the next few years. We recap the high points in today’s BAM Blog…

To see the detailed report in its entirety, click here. Yardi Matrix released its Summer 2019 multifamily report, and there were many positive indications that the multifamily market was on solid ground, with more largely positive years ahead (at least for the next few years).

  • All is not good news: the Treasury inverted yield curve indicates that a slow-down may be in the cards – despite low unemployment, tech industry growth, etc.. The expansion continues, Yardi notes, being built on strong ground; however, the warning signs for slowing growth are visible.
  • Job growth and unemployment are both still doing well, helping provide economic stability. The report notes that signs point to continued job growth.
  • While there may be warning signs of a slow down, a recession within the next two years seems unlikely. Further, a downturn isn’t expected to be as damaging to multifamily as the Great Recession was.
  • In the event of a downturn, B & C asset classes would be expected to experience increased demand, while A-class assets may see less demand and notice more upheaval. Overall, even in a recession, multifamily demand should remain consistent and strong.
  • At this mid-year point in the cycle, rents are up 2.6% year-to-date and 3.3% year-over-year.
  • For asset class, those in the lower-to-mid range have led in rent growth.
  • New construction supply remains consistent – with “lifestyle” demographic seeing the majority in most markets.
  • Demand is strongest in the necessity-renter demographic.
  • Due to both job growth and the high price of home ownership, demand for rental has grown, especially in metro areas.
  • Nationwide, over 105,000 units were delivered by the mid-year point, with under 300,000 added for the full year.
  • Inventory might have been higher; however, labor shortages and construction delays have delayed the completion of many projects. Yet, these delays have allowed the market to maintain rent and occupancy rates.

The BAM Bottom Line: Mid-year has seen consistent demand, rising rent, and projected continued positive performance. Although a downturn is not anticipated, even in the event of a recession, multifamily should be able to weather the storm.