18 Feb Experts Believe the Multifamily Sector Will Perform Well in 2013
If you ask experts at Fannie Mae and the National Association of Home Builders, 2013 is bound to be a great year for the mulitfamily housing sector. They are basing their assertion on already low vacancy rates and higher rents, and both groups believe that multifamily housing will aid in the real estate recovery this year because of its growth. According to Fannie Mae, asking rental rates are likely to increase 2.5% this year, while vacancy rates will increase to 6%. Both of those numbers are in-line with the historical norm.
David Crowe, chief economist for the National Association of Home Builders, said, “Last year was a banner year for the multifamily market, and our baseline forecast calls for further steady growth in the rate of multifamily production.”
Rent growth exceeded Fannie Mae’s projection of 3% coming in at 3.25% at the end of 2012. Fannie Mae says the slight increase in end-of-year vacancy rates is not abnormal because this is a part of the year when most people choose not to move.
Both the NAHB and Fannie Mae agree that there will be a boom in multifamily housing this year, including new construction. Other industry experts point to some specific hurdles, like the lack of available capital that is handcuffing developers around the country. Additionally, in certain parts of the country, rising costs associated with construction, materials and labor will play a factor in the multifamily sector’s ability to grow.