Are we experiencing the best time to invest in apartment complexes in history? All multifamily real estate trends point exactly in that direction.
The pandemic strain on the housing market is in effect. Purchase prices are skyrocketing while the inventory in both single and multifamily properties is shrinking and making it difficult to find deals in any market.
This imbalanced supply and demand curve in the market has created a field day for higher-income investors who’ve been able to snatch up deals and capitalize before listings even become available to the public. And it’s happening across the board.
Urban as well as suburban markets across the country are experiencing the same phenomenon —with no sign of easing up.
Multifamily has become a hot commodity for investors during the pandemic, and for good reason.
They’re low risk and offer investors the opportunity to make big profits from multiple units with just one purchase.
So, why’s it happening, and is it the best time for you to invest?
1. Multifamily real estate trends show that rental growth has exploded
The multifamily rental market has recovered since the early days of the pandemic and is thriving. Rent growth was up 2.5% year-over-year as of mid-2021 and was rocketing back to pre-pandemic levels.
And the upward momentum hasn’t let up.
According to Yardi Matrix’s October survey, the national average on rent for multifamily units was up 13.7% and reached an all-time high of $1,572, which has been great news for investors. The numbers have skyrocketed since then.
Multifamily investors have been able to capitalize on the upward trend of rental prices to enjoy much higher returns on their investments.
2. Both global and local investors are driving competition
$63 billion in Q4. That’s how much the U.S. multi-housing transaction volume jumped in 2020 thanks to demand, and not just by U.S. investors.
We’re seeing an increase in investor allocations from across the globe. It’s a trend that has been ongoing since the early days of the pandemic because rental pricing was able to maintain during the economic downturn in the recent past.
There’s a ton of money to be made. And investors are jumping on it.
3. Multifamily demand is strong, and not going away any time soon
Multifamily is currently through the roof! And it’s likely to stay that way for quite some time. In fact, housing dating from the census in November shows vacancy rates at an extremely low rate of 5.8% as of Q3 2021.
The lack of available housing tells the tale as buyers who would normally transition out of their rentals are being crushed due to the demand making new home purchases tough to come by — especially for 1st time home buyers.
Low inventory, high demand, stable rent prices, faster scaling, and higher levels of monthly cash flow create the perfect opportunity for multifamily investors.
If you know the game, have the capital, and can find deals, then there’s no doubt that this is a great time to invest in multifamily real estate.