New research shows that the multifamily asset class is seeing more growth than other commercial real estate sectors, and millennials are a driving force.
This sector experienced significantly more growth than all other commercial real estate sectors in the first quarter of 2019, according to a new market outlook report published by Ten-X Commercial.
That’s largely because millennials are also opting to live with their parents longer instead of buying homes after graduating college. The report showed that this was the case of 32 percent of 18-34 year-olds, compared to 27 percent in previous years.
The growth can also be attributed to a strong rental market. A decline in the number of new rental properties coming to market caused the vacancy rate to stabilize and existing properties already on the market to be rented faster. Deal volume of multifamily properties fell in the first quarter to below $36.5 billion, which was a 30.5 percent decline from the fourth quarter of 2018 and a 1.4 percent year-over-year increase. A plateaued homeownership rate, in addition to low unemployment rates and strong wage growth, also contributed to the overall growth of the multifamily sector.
The report also outlined the multifamily sector’s top five buy and sell markets in the first quarter, and their 2022 projections.
To read more about the research, click here.
