Noting concerns that current projections for the apartment sector might be too positive and reflect overconfidence in a time of economic challenges, investors recently indicated that they remain confident in future demand.
Several factors are expected to contribute to continuing strong demand for apartments, including the arrival of Generation Y renters to the market and the tendency for recent immigrants to rent rather than buy. Additionally, investors note that population growth is stable and sentiment has shifted to favor renting more than in the past, according to Multi-Housing News.
Certain markets and submarkets may defy these expectations for a number of reasons. In some, local economic conditions such as the nature of employment may attract more buyers than renters. In others, particularly small markets, post-recession optimism may lead to overbuilding, although the nation as a whole is not necessarily expected to experience that tendency.
Predicting overbuilding is a challenge since not all projects that are permitted end in a successful completion. Investors and rental property management firms may wish to keep an eye on local construction to see how their operations will be affected.