Apartment market set to boom

The multifamily housing market is expected to skyrocket over the next few years as the job market grows and rental-friendly segments of the population look toward apartments, but rents shouldn’t rise as much as Wall Street is predicting, according to John Burns Realty Consulting.

The apartment business will benefit because as jobs recover, the largest segment of the pent-up housing demand – young adults who have either moved back in with parents or taken on roommates – will gain the ability to afford their own unit. Construction will then be able to match the new demand.

However, although Wall Street and pension funds predict a 25 percent increase in rent growth for the hottest location, the consulting group says that’s not viable. Reasons for that include the option to buy instead: as rents rise, many renters may consider buying a home or condo instead. As well, with construction set to grow, there will be more places to live for renters – and more rent brackets to choose from.

For more information: www.realestateconsulting.com/content/SBMI-201106