Multifamily sector investment has been the leading aspect of the commercial real estate industry, an expert recently told Multi-Housing News.
According to commercial real estate firm Cassidy Turley's director of Research, Jeffrey Kottmeier, low household incomes and diminishing interest in homeownership have caused Americans to re-evaluate where and how they want to live, to the benefit of apartment owners and investors.
While mortgage information shows favorable rates have been available and 2011 has been marked by record low home prices, the countervailing factors have encouraged people to rent rather than buy. This is particularly true in Washington, D.C., and similar metropolitan areas, Kottmeier told the source, where the location and prospects attract a variety of renters from different demographics. Cities are hubs of job opportunities, a major factor given the high unemployment rate.
The capital also tends to draw a lot of young and old residents, according to Kottmeier. The young and elderly often prefer smaller housing units, because they require less upkeep and the residents do not need as much space.
Young workers and more experienced professionals have flocked to apartment units in these cities, supporting multifamily housing and pushing occupancy rates high. Among the workers who can afford to buy and who might be tempted by low mortgage rates, more are choosing to rent anyway, than would have been expected in the past.