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What’s in Store for Multifamily in 2020? Moody's Analytics Chief Economist Sheds Some Light

Blog Post01/29/2020
Business
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Will the next recession start in 2020? Will the multifamily industry take a hit?

Dr. Victor Calanog, Chief Economist at Moody's Analytics, offered powerful insights on those important questions during TransUnion’s 2019 Property Management Summit.

You can watch his entertaining presentation for in-depth analysis, but here are some of the standout takeaways.

#1. Vacancies are up — for now

As we wait for data from the second half of the year, the picture could change, but vacancies were flat in the second quarter at 4.7%, and rent growth is expected to decrease relative to 2018.

While vacancy rates are climbing, Calanog predicts 2020 will bring a leveling of supply, and the market will correct itself — so don’t sound the alarm just yet. 

National apartment market supply and demand trends

Source: REIS, Real Estate Solutions by Moody’s Analytics; Top 50 Primary Apartment Markets

#2. Millennials will fuel the market for years

Calanog admits we could see an exodus of 35–40-year-old “renters by choice,” who delayed purchasing homes because of fears propagated by the Great Recession. Now with children and changing needs, they’re heading to the suburbs.

Still, with the largest group of people around 28 years old, Calanog forecasts multifamily will be solid for the next five to 10 years.

Demographics by age

Source: U.S. Census Bureau, Population Division

#3. Boomers aren’t quite ready for senior housing

The second largest age group are Boomers around 55 who aren’t quite ready to move into senior housing facilities. People are aging healthier and living longer, so many are opting to remain in homes they own, move in with adult children, or rent apartments that require less maintenance but offer independence.

As a result, vacancy rates for senior housing have continued to climb. However, the market is highly contingent on location (Florida, for example, will see fewer vacancies than New York).

Seniors housing in the second quarter

Source: REIS, Real Estate Solutions by Moody’s Analytics

 

Watch the full presentation which offers additional insights to help you prepare for the year ahead.

And for information on how TransUnion is helping property management companies find quality tenants, visit our Resident Quality Management information page.

 

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