Apartments are leading the way in commercial real estate:
The bright spot in the sector has long been multifamily, as the recent CoStar Commercial Repeat Sale Indices asserts that pricing for the ten markets in the prime multifamily index having regained pre-recession peak levels, due to investor interest in the sector. As prices have risen, construction levels have followed, with double the number of units delivered in 2012 compared to 2011, with 2013 set to outpace both years.
Dr. Lawrence Yun, NAR chief economist, said rental housing demand has been exceptionally strong. “Rent increases have been higher in multifamily housing where supply is not matching strong demand, thereby allowing landlords to raise rents at faster rates.
Multifamily: it’s a landlord’s market, the trade group says, as vacancy rates slide from 4.0 percent to 3.9 percent within 12 months, with rents expected to increase 4.6 percent this year and 4.7 percent in 2014, after rising 4.1 percent in 2012.