by Bill McBride on 1/18/2011 12:44:00 PM
Tuesday, January 18, 2011
I am attending the NMHC Apartment Strategies Conference in Palm Springs today.
The first session asked: Is the recovery real for apartments? I'll have more later, but just a few quick notes ...
The overwhelming sense from participants is "YES" the apartment recovery is real. One data point - There are a record number of attendees this year.
The expectations are for a record low supply completed this year (as Tom Lawler and I have noted before). Some pickup in completions next year (2012), and then plenty of completions in 2013. The starts will probably pickup later this year, although I'll know more at a later session. The pickup in starts will help both GDP and employment growth this year.
The expectations are for strong rent growth over the next two years (around 5% per year) for large upper tier apartments. This will keep the vacancy rate from falling too much as owners trade off rent increases for occupancy.
Apartment market has bifurcated. Upper half of apartments are improving, regardless of geography. Lower half are struggling.
In 2010 most new households selected renting as opposed to owning. The feeling is this will continue for at least a couple more years.
I'll have more later ...