shared post from Class A Management
Healthy in 2014. That’s the report from Fannie Mae on what’s to be expected of the Multifamily Property Market in the coming year. It’s a trend we saw in 2013, even at times when it was least expected. In fact, the Federal National Mortgage Association reported continued rent growth and sustained occupancy levels through the end of the year, a time when both have a tendency to dip.
Keeping with the trend, Fannie Mae says 2014 holds much of the same, with both tenants and property owners demonstrating a continued demand for the industry. The best news? Looking at the graph provided by the agency, vacancies from now until 2018 are predicted to see very little change, with the first multi-year sustained vacancy rate since 1995.
What’s the Driver?
Wondering about the source of this trend? Job growth, of course, takes the bulk of the credit. The following numbers have been forecast by Fannie Mae’s Economic & Strategic Research Group:
- 6.4 percent unemployment rate by the end of 2014
- 1.9 percent increase in nonfarm payroll in 2014 and up to 2.0 percent in 2015
- An increase in household formations is expected to increase demand for rental units
Some More than Others
As Fannie Mae details—and from what we know to be true—not all areas of the country have seen or will continue to see this positive trend. In fact, particular areas of the country that ‘carrying’ others—bringing up the average for the whole.
What’s interesting is comparing the metropolitan areas expected to see positive job growth with those that aren’t. For instance, Cleveland, St. Louis, Detroit, Philadelphia, Boston, and Washington, D.C. are forecast to miss the mark on unemployment. This is while areas such as Austin, Houston, Dallas, Orlando, Louisville, Palm Beach, and Portland make the top of the list for most promising economies.
To owners and managers in the aforementioned cities expected to see growth, the question is clear: How are you going to differentiate your property to ensure your piece of this action?