Rent Rates and Multifamily Investments Set Records in 2018

It’s true that more boomers are renting now than ever, and a large subset of millennials are still trying to handle their student debt by staying in their apartments longer, but no matter how you look at it, 2018 was the best year for multifamily real estate this century. According to a recent report in HousingWire, renters paid more for housing than they ever have.

For 2018, Freddie Mac and Fannie Mae both had banner years, and commercial and multifamily debt hit an all-time high, all while delinquencies remained at historic lows. This is clear evidence that 2018 was the market’s best year since 2000.

A new report from CBRE shows that net absorption hit 286,600 in 2018, the highest level since 2000, topping 2017’s 277,000 total, and marking the highest total this century.

Multi-family construction activity was also high last year, with 267,900 units completed in 2018, slightly lower than 2017 when completions came in at approximately 274,000. Nonetheless, 2017 was a record year itself, with the highest number of completions since the 1980s.

Absorption rates provide information on the lease up rates of a rental market or an individual property over a certain time period. The report for 2018 shows multi-family absorptions were higher than completions for the second year in a row.

Beyond that, multifamily acquisitions were at their highest level in 19 years, up 12.1% from 2017, CBRE’s report stated. Also according to the report, multifamily investment totaled $50.9 billion in the fourth quarter, the highest in any quarter since the fourth quarter of 2015.

As CBRE notes, all this demonstrates a “strong appetite for multifamily assets by investors of all types outweighed concerns over rising interest rates, possible late-cycle exposure, and relatively low returns.”

The report shows 2018 vacancy rates at 4.5% in the fourth quarter, down 20 basis points from the same time in 2017. Those 2018 fourth-quarter vacancy rates will lead to strong investments in 2019.

Whether you want to acquire a four-plex, a 21 unit building, or a 150 unit apartment complex, call one of the most skilled Buyer Broker Purchaser Representatives in Atlanta – Robert Whitfield 678-585-9691.

Source: HousingWire, CBRE, TBWS