There is a considerable amount of new construction in the market. Eight Hundred new units were finished last year and an additional 1,475 are in some stage of planning or construction. The new construction is primarily Class A product with high end amenities. They are attracting the empty nester and baby boomers who are downsizing as well as young professionals who are choosing to rent. The 800 units that were built last year were quickly absorbed as the overall market was 97% occupied in the first half of this year. It will be interesting to see how quickly the market absorbs the coming 1,475 units. Older existing Class B apartments built in the 70’s, 80’s and even 90’s which have been renovated will remain in high demand as the math does not work for developers to build Class B units.
Transactional volume is down year-over-year. The issue isn’t finding a multifamily property, but finding one that makes financial sense. The problem is many investors are looking for the same thing, a newer property or an older property that has been completely renovated. To keep you informed of the value of your units we have attached a list of the more noteworthy sales completed in our market year to date.
We will probably see some pullback in our market in 2018, compounded by a slowing of rent escalations. That’s normal and nothing to be alarmed about. Overall, it looks like 2018 is going to be another successful year. We have REIT’s, Institutional Buyers, National and Local Buyers all looking to purchase.