Publications

- November 1, 2017: Vol. 29, Number 10

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Running strong: Multifamily sector bull run won’t quit easily

by Paul Fiorilla

Assessing the multifamily market, the old post office motto comes to mind: “Neither snow, nor rain, nor heat, nor gloom of night” can do much to dent the sector’s heady performance since the end of the last recession. Multifamily has seen seven years of consistent rent growth, with occupancy levels at or near historical highs in most major metros.

Of course, the real estate market does not care much about history; the question is whether the sector has passed its peak and is headed for a correction. There is good reason for concern. For one thing, property market history demonstrates the good times rarely last for so long.

Another worry is fundamental metrics are weakening. After a surge that reached cycle highs of 5.6 percent in early 2016, multifamily rents have decelerated in line with the 2.4 percent long-term average, according to Yardi Matrix’s database of 13 million units in 124 markets. To be sure, 2.4 percent rent growth is no reason for alarm, and it

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