The U.S. multifamily housing market is in fairly good condition from most landlords' perspectives, according to a recent report.
Demand continues to outstrip supply and is expected to do so for the foreseeable future, according to TD Economics. This is true despite the 59 percent in multifamily starts that took place from 209 to 2011. Single-family construction and demand remain low. While the pace of foreclosures has slowed significantly, it remains sufficient to contribute to stronger rental demand.
The South Atlantic is set for a particularly vigorous apartment boom, the report states. The region has a prior history of underinvestment and boasts relatively high new household formation and population growth. In comparison, the Northeast's multifamily market rebound may not be quite so strong. The fact that the supply gap is larger in the South Atlantic region also means that it will take more time to adapt, however.
In the long-term, analysts say that the market may face some challenges. A number of areas may experience more development activity than is warranted as investors try to meet the strong demand for new apartments. This could lead to an oversupply in some markets, though that is not expected to occur for some time. Still, rental property management professionals and other stakeholders should keep a careful eye on their markets.