Jul 16, 2017
Michael comments on his personal beliefs on apartment ownership.
He points to a few factors that keep his outlook positive.
According to a new study commissioned by the National Multifamily
Housing Council and the National Apartment Association, delayed
marriages, an ageing population and international immigration are
increasing a pressing need for new apartments in the U.S., to the
tune of 4.6 million by 2030. Currently, nearly 39 million people
live in apartments, and the apartment industry is quickly exceeding
capacity; In the past five years, an average of one million new
renter households were formed every year, which is a record amount;
and,
It will take building an average of at least 325,000 new apartment
homes every year to meet demand; yet, on average, just 244,000
apartments were delivered from 2012 through 2016.
Delayed house purchases- Life events such as marriage and children
are the biggest drivers of home ownership. In 1960, 44 percent of
all households in the U.S. were married couples with children.
Today, it's less than one in five (19 percent), and this trend is
expected to continue.
The aging population- People ages 65-plus will account for a large
part of population growth going forward across all states. The
research shows older renters are helping to drive future apartment
demand, particularly in the northeast, where renters ages 55-plus
will account for more than 30 percent of rental households.
Immigration- International immigration is assumed to account for
approximately half (51 percent) of all new population growth in the
U.S., with higher growth expected in the nation's border states.
This population increase will contribute to the rising demand for
apartments. Research has shown that immigrants have a higher
propensity to rent and typically rent for longer periods of
time.
There will also be a growing need for renovations and improvements
on existing apartment buildings, which will provide a boost in jobs
(and the economy) nationwide. The research found that 51 percent of
the apartment stock was built before 1980, which translates into
11.7 million units that could need upgrading by 2030. The older
stock is highly concentrated in the northeast.