The residential market is slowly recovering, but not in a conventional manner. According to Marcus & Millichap’s Second Quarter Apartment Outlook report, single families are seeking out apartments, rather than houses, as income remains low. In fact, homeownership plunged another 40 basis points to 65 percent during the past quarter, creating an additional 300,000 renter households. The report notes that the national vacancy rate remains at a stable 5.1 percent, but slowing effective rent growth signals an inflection point for space fundamentals.
Net demand for class B and C units is growing. The recent cooling of class A rents and subsequent surge in class B and C occupancy and effective rent growth illustrate the downward migration of residents from top-tier properties to class B and C units in response to robust rent increases, states th
