United States of America Multifamily MarketView Q3 2014
- Improving job growth and a rising propensity to rent are boosting net absorption; so far, this effect has been strongest in the South and West.
- With the labor market strengthening and income growing, there is greater potential for the release of pent-up household formation. This could keep demand and rent growth at their current pace through 2015.
- Rentable multifamily completions are expected to peak in 2015, to be followed by a more moderate pace of construction.
- Multifamily rent growth will stay slightly ahead of inflation over the next five years. While the vacancy rate is expected to rise slightly, it should remain near its historical norm.
- The strong pace of investment activity this year suggests that total sales volume in 2014 could surpass the prior record level of $105 billion, set in 2007. Multifamily would be the first property sector to reach this milestone.
- Miami Spotlight: Strong demand for apartments has outstripped supply since 2008, resulting in a low, 2.4% vacancy rate in Q3 2014 and a record-high monthly rent of $1,239 per unit. Since 2012, apartment construction has shifted into high gear, with more than 8,000 new units expected to be completed by the end of 2014, along with robust condominium construction.