End of Boom-times: The Impact of a Looming Slowdown in the Multifamily Market

According to recent data reports, there has been a monthly decline in the building of multifamily permits since March. The wall street journal indicates that construction of apartments may slow down in the coming two years. This fall in the graph will see an ease on oversupply concerns by hiking rent for tenants.This is after the previous year 2017 presented a high recession. The year 2018, however, seems to reach a saturation point which marks a showdown in the trend from previous years heading to the next. Constructed apartments in the past would peak at around 930,000 deliveries between the years 1983-1985 a target that was almost hit this year.The recession will see an increase in the average rent with the increasing number of tenants every year and the forming construction plateau. The housing market will have a lot to deal with by looking for ways to up supply with the demand. Expensive and lucrative markets are also adding a low supply of new apartments in their inventories stating no hope in a possible drop in rent prices.From a census bureau data,  where permits pulled to build 351,000 units in newer properties with a minimum of five units in September representing a 9% decrease every year.According to various developers, 347,000 apartments were constructed in the United States last year which saw a drop in rent from 5% in the year 2014  to  2.9% in the third quarter of 2018.The slow down has been affected by different factors. In places like the West Coast developers are struggling with a labor shortage. This will disadvantage major projects expected to deliver this year by being completed in 2019 or even later. Paul Munger, the National Apartments director of industry and research says demand can't be easily satisfied with the completion delays a setback resulting from a labor shortage. This means constructions completed will fall below the 300K mark unlike the previous year's upward streak marked with vigorous expansion.