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The national housing market is undergoing a major shift and multifamily investors are taking notice. Through economic and generational factors, the housing market is seeing a lessening demand for single family home purchases. Instead of buying a home, young professionals are opting to rent.
Mark Holmes may know this growing trend better than anyone. As a certified property appraiser with Value Tech Realty, Mark travels the United States appraising multifamily properties. As an appraiser, he understands this rental boom from a valuation perspective. As an active single family investor and passive multifamily investor, he understands what it means from an investor’s standpoint.
This episode, Mark gives us a recap of the the national multifamily market as well as the Florida multifamily market. We discuss the recent rental boom and what it means for multifamily investors.
National Multifamily Overview
- 63% home ownership, down from 69% (2004)
- 37% renters: 15 million shift
- Financial recession brought on behavioral shift
- Job growth jump-started multifamily development
Florida Multifamily Overview
- Landlord friendly
- 3% job growth
- Statewide rent growth: 4%
- I-4 Corridor rent growth: 6%
Florida Multifamily Markets
- 4000 MF units online, last 12 mo.
- 65% absorption rate
- 3.7% rent growth
- Class A: 4.5% cap rates; Class B: 6%
- 5,500 MF units online, last 12 mo.
- 57% absorption
- 4.8% rent growth
- 8% rent growth in last 12 mo.
- 3,500 units online last 12 mo., 3,300 coming
- Nearly 100% absorption
- 3.3% rent growth
- 4.45% cap rates
- 49% of income goes to rent
What It Means for Multifamily Investors
- Capital looking to invest in multifamily is out there
- Class A property growth concessions trickling down to B + Cs
- Most buyer interest is in multifamily
- Interest rate increases mean cap rate increases
- Major market cap rates seeing downward trend
Looking for property appraisals? Contact Value Tech Realty through their website. For single family and multifamily investors looking to work with Mark on a deal, contact him through email at email@example.com.