Themultifamily housing sector has been performing very well over the last fewyears and 2017 was another solid year.

Even though rent gains slowed amidstrobust development, and tenancy levels began to even out in some major citiesit still shaped up to be a good year for the industry.Expansion will play an importantrole in the U.S. multifamily market in 2018.

It’s expected that developers areon track to register the second-highest annual completions count of this cycle,with as many as 258,000 units delivered. This is based on 62 markets tracked by CBRE Econometric Advisors.So what does 2018 have in storefor multifamily housing and what trends will set the tone for the new year?The yearof amenitiesHaving a plethora of amenities isquite normal these days in multifamily housing developments.

Amenities such asswimming pools, gyms, day care’s and even spas are starting to become commonplace. However, due to the plateauing of home and rental prices in key marketssuch as New York and California, developers and property managers need toprovide something extra to attract new residents and retain current ones.Many developers are recognizingthe importance of amenities in such a competitive market and are adapting theirproperties accordingly. They’re also taking into account the new breed ofrenters (millennials) who are looking for the social and tech aspect that’sbeen missing from a majority living spaces.

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They are looking for a space thataccommodates their lifestyle and tastes. Being green and providing pet friendlyoptions are just some of the points taken into account. In metro cityproperties that offer bike storage and maintenance facilities are in greaterdemand than ever before.Real Estate Veteran MichaelMassie from ThePicerne Group stated “The common complaint about amenities isthat they’re like your grandmother’s living room: they’re nice to look at, butnobody ever uses them, we prefer to install amenities that people actuallyuse.”Service based amenities are alsostarting to become a viable option to increase occupancy rates and revenues. Servicessuch as laundromat or dog walking can be offered via a third party vendor basedon a profit sharing model.To keep up with the Joneses andto push the status quo of multifamily housing owners and developers areoffering a slew of amenities like never before:Amenities    MarketslowdownThe multifamily housing markethas been performing quite well over the last few years and 2017 didn’tdisappoint, registering 6.1% growth in Q4 of 2017.

However, as the saying goes”what goes up must eventually come down” and 2018 may start seeing thebeginning of this plateauing. The reasons for the slow down vary from highcompletion counts to increasing rental prices. This doesn’t mean that propertydevelopers and owners won’t have a good year it’s just that the signs arepointing to a possible downturn so it’s always good to be prepared. Thepersistent scarcity of housing has led to surges in rental rates. Nevertheless,market analysts predict that these dramatic price rises will likely slow in thecoming years as housing becomes more available.

However, don’t start panickingjust yet. According to CBRE U. S. “Developers are poised to registerthe second-highest annual completions count of this cycle in 2018, down by 9.2%from 2017’s cycle peak. Because apartment starts began to slow in 2017, themultifamily market will get a reprieve from new supply by late 2018 andthroughout 2019.

” As an investor it may pay to hold off on investing in themultifamily market until the end of the 2018.       Utilizingsocial mediaAccording to Statista in 2017, 81% of Americans had asocial media profile and they’re utilizing it for everything from doing theirdaily shopping to researching the new IPhone. What they’re also using it for isto find information about properties they’re interested in renting. Potentialrenters want to get an idea about the property even before they see it inperson. By seeing pictures, reading comments and seeing how others interactthey get a “feel and vibe” of a place and can make a better informed decision.Having a presence on social media platforms like Facebook and Instagram alsoprovides property managers a platform to engage with current and potentialresidents and is particularly effective for connecting with younger Millennialand Gen Z renters who are influenced by peer-based marketing. Class BpropertiesAs an investment option Class Bmultifamily properties are going to be quite attractive in 2018. Granted thatClass B property values and rent will be lower in comparison to their Class Acompetitors; nevertheless, Class B buildings are usually at least in good, ifnot great condition and may command above average rents.

These properties alsopose an ideal opportunity for owners and developers who are willing to investin improving these buildings. Many Class B or even Class C properties just needsome TLC and upgrades to command greater rent and attract a higher qualitytenant.Many metro cities have beenexperiencing an exodus of tenants due to dense population and lack ofaffordable housing. Suburbs are now becoming an attractive option and offerprime prospects for investors looking beyond the cities and searching for ClassB properties in the outer belt of cities. These suburban properties also tendto have a lower turnover as renters and buyers tend to be young growingfamilies who want stability for themselves and their children. Many suburbanproperties tend to be pretty quiet compared to the city while also sporting bigbackyards and outdoor communal spaces which make them easier to rent out.

           Of course there are many moretrends that should be taken into account when investing in multifamily housinghowever, the 2018 trends mentioned above will provide a guideline for what tobe aware of.To know more about finance andaccounting services and how they can streamline operations for multifamilyhousing providers getin touch with us.