14C — May 15 - 28, 2015 — NJAA CONFERENCE & EXPO — M id A tlantic
Real Estate Journal
www.marejournal.com
2015 NJAA C onference & E xpo By Glenn Ebersole, Hollenbach Construction, Inc. What lies ahead for multifamily housing construction?
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ultifamily housing cons t ruc t i on d i d well in 2014 and has
what other possibilities might exist. One part of the reason is our current demographics. The Millenial Generation (basically ages 20 to 34) are much more likely to live in apartments than are older adults. And the number of Millenials (the children of the Baby Boomers) is rising and will eventually surpass the number of Baby Boomers basically ages 51 to 69). The Millenials have lived through the real estate col- lapse of a few years ago that devastated the idea that home ownership is a sure-fire, no-
risk way to riches. However, looking to the future when the current group of Millenials get
ing to see what the future holds for multifamily con- struction we must view the
growth of young adults fore- cast. Multifamily is strong now, yet it is important to think strategically about what will be coming in five to ten years. There is a probability of a major shift away from multi- family back into single-family homes. It will be essential to monitor this and gauge its impact on multifamily hous- ing construction. Reviewing forecasts from Freddie Mac and Forbes here are a few highlights of what lies ahead. Declines in homeownership related to economic stress and high foreclosures in the single-family housing market have benefited the multifam- ily market. Homeownership rate will drop 1 to 2 percentage points if the current slow recovery continues. Multifamily market de- mand is expected to be strong through 2015 primarily due to demographic trends and a decreasing national homeown- ership rate. Rental demand will con- tinue to grow faster than historical averages. Multifamily housing will continue to provide greater flexibility and mobility and be deemed more convenient by those seeking to simplify their lifestyle, downsize or maintain locational flexibility due to job or family issues. A quote from David Brick- man, senior vice president of Freddie Mac Multifamily provides a great summary re- garding the optimism for mul- tifamily housing construction. “The research supports the optimism that currently per- vades the multifamily market. It confirms that multifamily is a bright spot in in the real es- tate market and the economy more broadly, and it will likely continue to shine for quite some time. The economic data indicates that current rental markets are very strong with low vacancy rates, rising rents and solid demographic trends. What this research demon- strates is that these conditions are likely to remain in place for several years to come.” Glenn Ebersole is the Strategic Vice President of Business Development/ Marketing & Strategic Leadership Team lead at Hollenbach Construction, Inc. of Boyertown, PA. n
c o n t i n u e d t h a t p o s i - t i v e t r end in 2015. So w h a t l i e s ahead for this construction market seg- ment? Why is multifamily
“Multifamily housing will continue to provide greater flexibility and mobility and be deemed more convenient by those seeking to simplify their lifestyle, downsize or maintain locational flexibility due to job or family issues.”
married and add children to their household and the kids grow beyond toddling to being much more mobile, the young parents may start looking for a house and move out of the multifamily setting. Looking ahead and attempt-
demographics. The current de- cade will have higher growth of the Millenial population than the past decade, which helps to justify the strong mul- tifamily construction market. However, in the years 2020 to 2030 there is virtually no
Glenn Ebersole
living so popular now? The one reason that comes to mind first is a major change in at- titudes about how we live. In addition to the attitude shift
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