When: November 20th, 2017
Why: Builders slowing pace after construction reached a 42 year high in 2017.
This confirms my personal opinion on my local market here in Denver, CO. My gut feeling is that the luxury multi-family segment in particular is becoming over built. There has been massive growth and many builders where rushing to catch up in order to cash in on the trend. The multi-family inventory that was being built was to match the young workforce attempting to attract high quality and high rent tenants.
My prediction is that many of the higher end multi-family units will end up dropping prices to get tenants in the door during 2018. More incentives will be offered by the new builds which will be great for renters. My long term call is also that millennials will end up being more like their parents then the media thinks and that home buying is just being delayed. Many renters will shift to home owners in the next decade which will put more pressure on the multi-family market. Growth has been fantastic in many major metropolitan cities in the multi-family market. However, I do not see wages keeping up with the rents being asked moving forward.
What Are Your Thoughts?
- What have you noticed in your local market?
- Do you rent or own?
- Do you think areas might be getting overbuilt which will lead to lower rents in the future?