The projected apartment demand in the U.S. for 2020, which is estimated at 240,000 units, indicates a slower economic growth. However, the demand for multifamily housing remains sufficient due to affordability issues faced by millennials moving into homeownership. The investment in multifamily housing has seen a drop in areas like New York Metro and Greater Los Angeles, partly due to new rent control regulations. However, there has been an increase in the San Francisco Bay Area. The current market performance and investment returns suggest that buying or building in the suburbs is a good option. Investors and developers are also advised to consider smaller metros with a population under 2 million.
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Because of slower economic growth in 2022 and 2023, apartment demand in the U.S. is projected at 240,000 units in 2020. Millennials continue to move into homeownership at a modest pace due to affordability issues, but multifamily demand remains sufficient enough. New York Metro's 9.2% year-over-year (YoY) drop in multifamily investment was partly caused by the implementation of new rent control regulations. Greater Los Angeles had a 9.8% drop in investment YoY, but the San Francisco Bay Area had a 7.4% increase. Buying or building in the suburbs remains the best bet based on market performance and investment returns. Investors and developers should consider smaller metros – under 2 million population.