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The Multifamily Market Today

The Multifamily Market Today. CREW Network Convention & Marketplace September 15, 2011. Outlook for Multifamily Industry is Bright. Strong demand from growing “Echo Boom” population and positive immigration inflows 98% of jobs created in the past 12 months went to the 20-34 age group

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The Multifamily Market Today

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  1. The Multifamily Market Today CREW Network Convention & Marketplace September 15, 2011

  2. Outlook for Multifamily Industry is Bright • Strong demand from growing “Echo Boom” population and positive immigration inflows • 98% of jobs created in the past 12 months went to the 20-34 age group • Homeownership rate declining steadily • Negative sentiment toward home ownership • Limited new supply of housing expected for next several years

  3. Favorable Demographics with High Propensity to Rent Over two-thirds of this age group choose to rent Actual Projected Source: Witten Advisors

  4. Pent-up Demand from Young Adults at Home Source: Witten Advisors

  5. Homeownership Rate Declining Actual 2Q11 65.9% Source: Witten Advisors

  6. Negative Sentiment Toward Home Ownership • Many people choosing to rent rather than buy • Moveout rates from apartment residents purchasing or renting homes have declined dramatically (23% peak vs. 11% in 2011) • Strong credit scores and significant down payments now required by mortgage lenders

  7. Housing Supply • Multifamily supply near historical lows due to tighter capital standards • Excess single-family home inventory doesn’t compete with well-located apartment homes • Vacant and foreclosed homes are located in remote areas and lack amenities offered by professionally managed apartment communities

  8. Multifamily Starts Source: Witten Advisors

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