Economic recovery volatile as multifamily sector slows

Some real estate analysts project the U.S. economic recovery will be volatile and uneven, in keeping with their earlier expectations.

Data firm Marcus & Millichap sees the nation's economic future much as it did a year ago, although the multifamily sector's recovery has slowed somewhat, according to the company. Issues with the country's debt ceiling and credit rating have had an impact, as have international factors such as rising gas prices.

High unemployment, low consumer confidence and the single-family housing market are all contributing to the country's economic state, experts say. While these long-term factors may continue to slow recovery for some time, however, the firm notes that private sector job growth, productivity and corporate profits are all increasing, favorable signs for the future. Low interest rates, rising exports, GDP and retail sales also suggest that things are looking up.

While the pace of private sector employment growth has picked up recently, a significant number of government jobs have been cut, the firm notes. However, data suggests that more companies are hiring permanent staff rather than temporary workers. Rental property management firms and investors should look at job growth carefully, according to Marcus & Millichap, because when the pace rises there may be a surge in household formation among young adults currently staying with their parents.