New supply continues to stay ahead of demand, with minimal increase in overall vacancy rates and moderate rent growth in the national market
Vacancy is 5%, up 10 bps this year
Rent growth average is 2% YOY
12-month completions are moderate, totaling nearly 260,000 units; net absorptions near 230,000 units
Multifamily asset acquisitions reached $35B
CoStar data also indicates stable growth in the multifamily sector, reporting that the U.S. multifamily index posted the second-strongest growth rate in the last 12 months, rising 1.7% in Q1 2018 and 7.8% over the past 12 months.
Long-term trends lean positive for multifamily sector outlook.
Population growth, particularly in areas with high immigration rates
Real household income growth continues only for the top 20% of earners meaning homeownership less affordable for many
Mounting student loan debt has all but stalled home ownership for younger households
Increased demand for rental housing by rapidly growing Baby Boomer population who are reevaluating their retirement options as they age out of home ownership
Should capital improvements be on your radar?
While the start of 2018 remains strong for the multifamily sector, rumors of looming market corrections persist. With this in mind, strategic but sensible improvements now could prove advantageous in the long run. Modernizing curb appeal, boosting security and adding amenities that improve quality of life top the list of upgrades that improve ROI by attracting new renters and increasing resident retention rates.
Funding strategies for multifamily capital improvements.
Even small improvements aren’t always easy to plan or budget for. One strategy that often proves effective for multifamily property owners interested in saving for capital improvements is to protest their property valuations each year and move resulting tax savings into their capital improvements budget.
It’s been reported that each year over 90% of business owners overpay their taxes. Even worse, if not remedied, those overpayments have a compounding over time. If you’re ignoring your property taxes, you’re likely throwing hard-earned money out the window.
Bottom line: Stop overpaying property taxes and start putting that money to good use. Find a well-qualified property tax expert to help you identify untapped savings opportunities.