The multifamily housing construction in the Southeastern United States is in high demand. Occupancy levels have reached the highest in years at 95.9%, while vacancy levels are at record lows.
“Developers have struggled to produce enough new housing to meet demand in recent years,” said Greg Willett, chief economist at RealPage. “However, the volume of apartments on the way in 2020 certainly could test the market’s ability to absorb a big block of additional units in a short time frame.”
Multifamily construction and renovations continue to be a valuable investment with high returns. Partly due to the low interest rates.
“The low interest rate environment, coupled with continuously strong demand for commercial and multifamily assets, has pushed property values higher and increased demand for mortgages,” said Jamie Woodwell, MBA vice president for commercial real estate research. “At the beginning of the year, many economists, investors and others anticipated long-terms rates would be around 3% and rising – potentially putting pressure on property values and decreasing demand for debt.”
“Instead, the 10-year Treasury yield is at approximately 1.5%, and many market participants are planning for rates to remain ‘lower for longer,’” Woodwell said. “The result is heightened demand and higher volumes.”
Where is the market the expect to grow?
According to Housing Market;
Out of the seven smaller markets expected to see a spike in new supply, four of them are in Florida.
Palm Bay; Deltona-Daytona Beach; North Port-Sarasota-Bradenton and Cape Coral-Fort Myers, Florida are anticipated to receive 2,234, 3,000, 1,700 and 3,000 new units, respectively.
Wilmington, North Carolina will also see a sizable amount of units arriving this year, with an estimated 1,400 units expected to be delivered.
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