Apartments’ investment outlook ‘very strong’

Hi Everyone,

Below is a cool article about the Apartment outlook.  Not surprising that this pretty strong compared to sales.   This is good news for real estate investors.  All of my real estate investor contacts don't have any vacancies and have been able to successfully increase rents too, so needless to say they are pretty happy 

March 12th, 2008 · 15 Comments· posted by Mary Ann Milbourn

The National Multi Housing Council says it's about demographics. Apartments look like the place to be for real estate investors thanks to a growing demand for rentals, says the organization representing the industry's largest firms.

"The outlook for the apartment industry going forward is very strong," said Mark Obrinsky, HMHC chief economist. "The nation's 75 million echo boomers are already entering the housing market, and most begin as renters. ... Strong immigration levels add even more demand for rental housing."

Obrinsky said apartment owners are benefiting from restraint during the housing boom, which kept them from overbuilding. "As a result, they have escaped the oversupply problems plaguing the single-family sector," Obrinsky said.

Renters nationwide are expected to increase by nearly 4 million households over the next 10 years, with half of those likely to rent apartments, according to the council. In recent years, construction has only met two-thirds of the apartment demand. With the vacancy rates little changed over the last five quarters, apartment owners continue to be able to get modest rent increases.

"Apartments continue to be an investor favorite," said Obrinsky. "And rightly so. ‘Real' returns (that is, returns over and above the rate of inflation) to privately held apartments have averaged almost 11 percent over the last five years."

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