Firm expects strong multifamily fundamentals, completion surge approaching

Despite a degree of volatility in project starts during recent months, analysts say the multifamily sector's outlook is positive.

The most recent report from Keefe, Bruyette and Woods indicates that multifamily construction starts will continue to increase due to improvements in the industry's fundamentals. While metro areas including the District of Columbia, Seattle, Austin, San Jose and Raleigh may receive new supply in 2013, the firm forecasts that the boom in new units coming online will happen the year after.

The conclusions and projections are based on data from the U.S. Census Bureau, which showed a decrease in multifamily sequential starts in May. At the same time, average sequential starts over a six-month period were up year-over-year and more permits were issued for projects with at least five units.

Rental property management firms and owners may find that marketing and attracting tenants becomes more important when that surge hits. While housing demand is expected to grow, the increased competition may require professionals to refocus their efforts in the multifamily sector to perform well.