economy-downturn
Jan 14 2019

Will 2019 Bring an Economic Downturn for Multifamily?

All the talk about a 2019 downturn may end up being exaggerated, just a bit. There are some signs of a slight decline, primarily due to the uncertainty in the market. However, many of these are simply overblown.

The economy’s fundamentals are strong and there seems to be a good amount of momentum. This is good news for property management companies. As multifamily real estate continues to grow investor’s portfolios, property managers should have a positive 2019.

REITs

This 2019 also is gearing up to be a positive year for REITs as well. Rising interest rates don’t affect the REITs like other sectors.

Market Ups and Downs

Experts are always trying to predict the next downturn. Recessions are somewhat predictable. Imbalances are one cause of recessions. The imbalances between supply and demand. Too much multifamily construction projects that exceed demand will eventually require a correction in the market.

Too much debt also can be a factor in market shifts, primarily downturns. With real estate, borrowing has been pretty much stable and not stretched beyond the norm. That’s good. It shows investors have learned from the past real estate recessions.

Overheating is another factor that is looked at by experts in predicting the market. Overheating is directly related to the Fed’s interest rate movements. The Fed tries to prevent inflation by moving rates higher or lower based on the market.

Looking at these factors for 2019, it doesn’t appear that a recession will be coming about in 2019.

2019 Market Winners

The upcoming year looks to be a banner year for apartments and retail. Retail has been hit hard with several bankruptcies in 2017 but they have done pretty well filling those properties that were vacated.

Of course, certain retail areas do better than others. The higher the quality and density of the retail stores, the better. Property managers are still doing well in this market. The overall stability of the real estate market is also good for property management software companies who provide the tools to manage these portfolios.

Apartment sector is also predicted to do very well. The construction of new single-family homes has been on the decline and there is now a shortage nationwide. This shortage is good news for investors with apartments in their portfolios. While there is a need for the class A type of apartments, there is still a great need for class B housing as well.

Buckle up for a great 2019!

About PropertyZar

PropertyZar is a real estate technology company specifically in the web-based property management software for owners and professional property managers. Read more Top Property Management Blogs. Learn more www.PropertyZar.com