Right before the holidays, I attended a luncheon by CREC (Chicago REC) that featured Ron DeVries of Appraisal Research Counselors and I can surely say that what may be a bad situation for some is definitely turning out to be a good situation for others.
Ron pointed out that suburban apartment rents have continued to trend higher as would have-been buyers seek the refuge of renting along side former homeowners now relegated to renting due to their inability to buy.
All of that points to continued strength for multi-family and apartment building owners in the suburban markets around Chicago. Granted, not all areas are peachy-keen, but most of them are. One commercial broker last week commented that he has 23 showings and 8 offers on a 12 unit building which was fully rented. Needless to say, he was 'quite' happy.
Better yet for landlords, Ron indicated that 2012 should be another good year for rental income and net operating margins. Granted this is not great news for renters, but then again, they are not losing 10% year over year by buying a property that might only go down in value.
So, it does remain to be seen just exactly how 2012 pans out, but right now, the multi-family and apartment sector continues to be a profitable segment for owners.
Michael Hobbs, PahRoo Appraisal & Consultancy