Will The High Supply Of Apartments Take Its Toll On The Real Estate Market
The supply and demand rule is sacred in every industry, and the real estate market is certainly no exception to the rule. When the demand for apartments is high yet the supply is at an all-time low, this can cause the rental prices to sky-rocket, while when the demand is lower than the supply, the rental prices tend to plummet. Duplex properties, Norfolk single family homes, condos and homes are starting to fill up, and the apartment vacancy rate has recently increased for the first time over the last years.
The worldwide economic crisis that hit the real estate market a few years back is gone now, and the market is bouncing right back. Both the large construction companies and the independent contractors are asking themselves the same thing: will this oversupply of condos, single family apartments and rentals pinch the rental market?
“Don’t believe the world owes you a living; the world owes you nothing – it was here first.” – Robert Jones Burdette
Statistically speaking, 2014 was the most productive year of the decade in the construction industry, with more than 160,000 new apartments being built not just in the United States, but also in Europe – finding Ghent single family homes for sale has never been easier for those who have decided to settle down. However, there seems to be a tendency to overbuild, without taking the demographics into control, and this can affect the otherwise robust real estate market. If the builders will continue to build apartments at this pace, it will be virtually impossible for the demand to keep up with the supply.
The Rental Prices Have Increased Last Year
The average rent has increased by almost 4% in 2014 alone, and rents are slowly starting to set new records. There are many reasons why this happens: the labor market has improved tremendously, the faster wage growth has determined an increasing number of people to look for affordable apartments or houses to rent, and such. The big city centers are already filled with cranes and construction equipment, but all specialists agree upon one thing: the next building boom will take place in the suburbs of the large cities, not in the already established city centers.
Are Multifamily Homes Making A Comeback?
One sector that has managed to stand out from the others in the real estate market is the multifamily real estate niche – an increasing number of multifamily real estate developers have started to compete with condominium developers, although the multifamily market has not seen the same kind of “rental boom” as the single-family real estate market did a few years ago.What is a single family home? Simply put, this is a free-standing residential building that serves as a single detached building, unlike the multifamily homes.