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How Oversupply is Reshaping the Rental Landscape

How Oversupply is Reshaping the Rental Landscape

Commercial Real Estate Investors Association
August 14, 2024

“5 minute weekly bites to get you updated!”
A weekly newsletter by Commercial Real Estate Investors Association

WHAT IS IT ABOUT

As we approach 2024, apartment supply is set to rise significantly, with 440,000 new units expected and over 900,000 under construction. This will likely increase vacancy rates and slow rent growth to 1.2%. Despite challenges, occupancy rates should remain above 94%, driven by job growth in markets like Austin and Dallas. Multifamily real estate helps address the single-family home shortage, with mortgage premiums over rent staying high. Construction starts are expected to decline, leading to a recovery in occupancy and rent growth by 2026. The Midwest and Northeast will see the strongest rent growth, while Mountain and Sun Belt regions may initially face negative rent growth but attract in-migration. Current conditions offer buying opportunities for long-term investors, especially in the Midwest and Northeast, with increasing importance placed on local regulations, climate risks, and infrastructure.

HERE’S THE GIST

Predictions on inflation and its effects on rent growth and property values.
Geographic markets are expected to perform well based on economic conditions and local demand.
Analysis of demographic trends influencing demand for multifamily housing, such as population growth and migration patterns.
Trends in sustainable building practices and their adoption in the multifamily sector.

What’s New with AI & Tech for Real Estate Businesses

How Generative AI Accelerates Staging and Sales
Smart staging, Quick Closing

Transforming your real estate game with the power of generative AI, which can stage a home virtually in seconds, craft engaging property descriptions instantly, and provide valuable market insights through data analysis. This technological ally not only slashes costs and time but also enhances the quality of your listings, making the process of selling homes smarter and faster. With AI, real estate professionals can boost their productivity and close deals more efficiently, ultimately reshaping the industry landscape.

🧠 Learning of the Week

In just seconds…

In this week’s learning episode on Passive Investing Guide, let’s explore the “Emerging Markets”.

Investing in emerging markets offers readers the opportunity to capitalize on high appreciation potential as these markets develop, leading to significant returns. Lower real estate costs in these regions also translate to better rental yields, providing a lucrative avenue for passive income. However, due to increased volatility and unpredictability, thorough research and ongoing monitoring are essential to navigate these markets effectively.

Additionally, diversifying investments across multiple emerging markets is a key strategy for mitigating risks and enhancing rewards. By spreading investments, readers can reduce the impact of local economic fluctuations and achieve more stable long-term returns. Overall, the topic emphasizes the importance of a strategic, well-researched approach to maximize the benefits of investing in emerging markets.