Shadow demand in U.S. housing: When living with the in-laws gets old
The financial crisis and resulting wave of homeowner foreclosures has had long-reaching behavioral effects not easily captured in standard demographic metrics. It is not strange then that many people have missed a fundamental change in demand for rental housing, which has created an opportunity unlike any we have seen in more than three decades of investing and operating U.S. rental properties.
After a two-year stint of multifamily acquisitions in 2012–2013, threats of oversupply were beginning to frequent real estate blogs and articles, and we thought it wise to investigate. The nation was beginning to recover from the financial crisis, multifamily starts were climbing from historic lows and construction material prices were up. Yet our intuition, backed by feedback from operations and 30 years of experience investing in multifamily real estate, was that oversupply did not appear to be a threat. In fact, we were observing a steady increase in rents and occupa