Oct
25
Apartment Boom Nears Its End
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UCLA Anderson School is based in Los Angeles.LOS ANGELES—Senior housing economist David Schulman published an economic letter in the UCLA Zinman Center for Real Estate with some compelling observations about the home market. Most notably, Schulman predicts that the apartment boom will start to see strain by the end of 2016 as the homeownership market picks up and puts downward pressure on rents. He expects new construction levels to negatively impact apartment vacancies.
“Our guess is that the old average of 1.5 million units will be the new peak in the coming years. Longer-term demographics and affordability issues are beginning to work against the demand for housing,” Schulman tells GlobeSt.com. “With developers building for the top of the market for high-income renters, they may not yet to be cognizant of this trend, but they will soon find out that the high-end apartment market might not be as deep as they think.”…
