21 Jan Is Multifamily Still A Great Investment In 2020?
Are you searching for more information on if multifamily properties will continue to be a great investment in 2020? If so, you’ve come to the right place! In this article, we will provide you with an update on the status of the multifamily property market in 2020 and what you can expect as the year moves forward.
Demand
As of January, some economic analysts predict that the multifamily market will experience a mild slowdown in 2020 and will only rise by just 20 bps. This is below the long-term average growth that the multifamily market has been experiencing in recent years of 5.1%.
Multifamily deliveries are also expected to slow down as well to 240,000 units, this is 20% less than the 300,000 deliveries that came to the market in 2019.
In spite of fewer deliveries, multifamily developers will continue to remain active in 2020.
Source – cbre.us
Shifting from Urban to Suburban
Another major development in the multifamily market that we can expect to see in 2020 is that development is shifting from urban locations, to suburban locations. Unlike other suburban developments in years past, the new suburban product will be “suburbanesque”. This means that new developments will be a mixture of urban and green space properties.
Rent Control Will Have an Impact In 2020
With AB 1482 being signed into law, and the desire for more rent control measures statewide, multifamily investors can without a doubt expect rent control to have an impact in California during 2020.
Besides California, rent control is also having more of an impact in states like New York and Oregon as well. Sadly, it’s also becoming increasingly likely that other states including Washington and Illinois are considering rent control legislation too.
Just about every economist, including major financial publications like Forbes, agree that rent control is a bad economic idea that always results in a disaster where its implemented in the United States.
The solution to the problem of skyrocketing rents isn’t rent control, states need more inventory to be built because when you bring more supply to the market this will meet demand and bring down rents in California, and across the United States.
Contact MW Real Estate Group
At MW Real Estate Group, we can help you with sourcing, acquiring and managing investment properties in the Los Angeles area. To learn more about the property management services we can offer you contact us today by calling (213) 927-2117 or click here to connect with us online.