Forecast for Rental Housing Demand 2008

Linwood Thompson from Marcus & Millichap's National Multi Housing Group put on another enlightening presentation that took attendees on a walk through of where the industry has been, the current state of the market for investors and where the current economic environment may lead us. This took place on Day 3 of the Apartment Finance Today Conference.

Here are some of the key takeaways from my perspective:

• Although transaction volume has suffered due to the capital markets fallout, the negative rhetoric in the press (lumping multifamily with other assets) is a misleading assessment of our marketplace right now.
  
• The key components of solid fundamentals that will drive multifamily success: Delinquency rates are still less than 1% in multifamily, demographics and immigration trends are extremely compelling going forward and the lack of new supply over the past 10 years keeps rent growth on a solid foundation.
  
• Many overlook the fact that investors are getting high yields on distressed paper right now. Once that opportunity is gone they will return to traditional deals and multifamily will be a core asset class for investment.

Shoot me a note if you are interested in getting a copy of Linwood's presentation. He covers the topic in great depth and provides solid sources for his findings. You can also view a previous post for his first 2008 forecast back in October. Many of the fundamentals he outlined then remain unchanged.