Investors are getting ready for another great year as apartment development is expected to remain steady in 2020. According to the latest reports, construction and renovations of multifamily housing and apartments are expected to have a high return investment in the upcoming year.
The occupancy rate is expected to stay well above the normal at 96.3%. Higher end accommodations will be in great demand.
The HousingWire explains what will happen in the multi-family housing market:
“Increasing completions point to a competitive leasing environment for luxury product in 2020. About 550,000 market-rate apartments are under construction right now. Approximately 366,000 of them are scheduled to finish in 2020,” said Real Page Chief Economist Greg Willett. “That targeted delivery volume jumps sharply from 2019 completions of around 279,000 units.”
“While there’s not much middle-market product on the way, there will be a few additions in outlying areas of big metros, basically areas where lower land costs allow the delivery of some projects with lower rents,” Willett said.
“Likewise, middle-market product will come in secondary and tertiary markets where it’s still feasible to build lower-cost, garden-style properties with surface parking,” Willett continued. “The limited deliveries of Class B and C projects in most places point to continued sky-high occupancy and solid rent growth.”
The strongest markets are located in close proximity to flourishing core cities such as Atlanta, Miami, Jacksonville, Tampa, and Orlando. These sub-markets will experience a ‘spillover effect’. The demand for apartments are high and they won’t be as affected by competing new construction.
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