The attached Costar article, U.S. Multifamily Market Strengthens in Third Quarter On Rising Demand, Falling Vacancy, discusses the results of a recent Costar report. The overall message is the US multifamily markets are getting better with strong leasing, rising demand and falling vacancies. Good news.
For me the most interesting thing on the article and report are its vies on the future. Landlords are getting pricing power and able to increase effective rents. “National vacancies are expected to fall by 2% from their historic 2009 high, ending at about 6% in 2015″. This is not a new prediction, but its nice to keep hearing it. If this is true and we will get rent growth then maybe values will hold when rates eventually rise and today’s low cap rates will look realistic based on future NOI.