 |
| | | | | | | | | | | | | Apartment Construction Is Reaching 'Dangerous Levels'
With Americans generally reluctant to commit to buying homes, the market for rentals has exploded.
But Adam Artunian of John Burns Real Estate Consulting worries that things may be overheating in this market.
"Apartment builders continue to feverishly build to capitalize on rising rental rates and favorable demographics, but construction is reaching dangerous levels in some markets," wrote Artunian.
He notes two major headwinds to the apartment market: - "The average monthly cost of homeownership is currently equal to or below the average rental rate in most markets."
- "The move-out to purchase ratio (as reported by the apartment REITs) has risen to 14% from 11% in 2010."
"Construction activity has been especially elevated in tech markets like Raleigh, Austin, and San Francisco, which are currently over 175% of historical norms," wrote Artunian.
However, Artunian notes that much of the supply in the hottest markets should be filled by local job growth. Furthermore, construction in most cities are below peak levels.
Nevertheless, participants in the rental market should be mindful of the warning signs.
Here's his chart:
Read » | | | | | | |
| | | |
Also On Money Game Today:
| | | | | | | | | Advertisement
 | | | | | | | | | | | | The email address for your subscription is: dwyld.kwu.jobhuntportal11@blogger.com
Change Your Email Address | Unsubscribe | Subscribe | Subscribe to the Money Game RSS Feed
Business Insider. 257 Park Avenue South, New York, NY 10010
Terms of Service | Privacy Policy
 | | | | | |
|
If you believe this has been sent to you in error, please safely unsubscribe.
Facebook
Twitter
Digg
Reddit
StumbleUpon
LinkedIn
No comments:
Post a Comment