In the year ahead, demand for multifamily properties in urban areas and in the affordable housing sector will continue increasing, while appetite for luxury condos may slow down, predicts Byron Carlock, Jr., U.S real estate practice leader with consulting firm PwC. Carlock, whose past stints included the role of CEO and president of CNL Lifestyle Properties and chief investment officer of Post Properties, is a member of the Urban Land Institute and a board member Emeritus at Harvard Business School.
Below he shares his predictions for the multifamily sector in 2015:
- There will still be a shortage of housing units in most major markets, and the industry will see an affordable housing problem in the top markets.
- Multifamily demand will continue to increase with urbanization trends, which are attracting baby boomer and Millennial cohorts to multifamily housing.
- Nearly 29 million Millennials still live at home (due to student debt and delayed entry into jobs that allow self-sustenance). They will move out and start their own households over the coming years as the economy's slow recovery continues.
- Ultra-high-end multifamily condo housing in certain major markets is seeing high prices supported by foreign buyers, although questions are emerging as to the depth of that buying community. A slowdown in the escalating prices in New York City is beginning to be discussed.
- 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.