As demand for apartments skyrocketed during the recent recession, the development of multi-family housing surged. The market is currently regaining its health, but as home prices, as well as mortgage rates have risen steadily over the past year, the demand for apartment rentals have remained secure.
As stated in a story on HousingWire, “The multifamily sector will continue to benefit from short-term leases, allowing owners to raise rents as the economy recovers – particularly because declining homeownership has boosted demand and new supply remains modest in most markets.”
In many places in the US, housing prices are much too high for first-time buyers to be able to afford. In the town of Chandler, Arizona, multifamily housing development is rapid, and has increased drastically over the past year. “There have been about 540 apartment, condo or townhouse units added in 2013,
compared with 457 single-family homes, according to the city’s Planning Department. In 2012, here were 432 more single-family homes built than multifamily units.”
As for condos, developers are wary of building because they aren’t sure how the market will react to condo construction. For now, they have been building and renting them out as apartments, but rentals may switch to condos within a year or two if the market picks up. For now, rentals are a safe alternative.