SEATTLE NEWS ARCHIVES & FEATURES
Higher rents eventual ‘wake-up call’ to buy – UCLA report
Aug 21, 2012, 9:11 AM | Updated: Mar 4, 2016, 5:55 am
The dramatic rise in multifamily starts will continue for another two years as more credit-starved individuals turn to apartment rentals, David Shulman, senior economist with the UCLA Ziman Center for Real Estate, suggested in a new report. (AP Photo/file)
(AP Photo/file)
The dramatic rise in multifamily starts will continue for another two years as more credit-starved individuals turn to apartment rentals, David Shulman, senior economist with the UCLA Ziman Center for Real Estate, suggested in a new report.
At the same time, the dramatic uptick in multifamily construction carries the “seeds of its own destruction” since rents will eventually exceed home mortgage payments, causing a dramatic shift away from apartment renting.
“The American Dream of homeownership may be comatose, but it is not dead, and the wake-up call will come in the form of higher rents,” Shulman wrote.
Still, the homeownership rate today is falling while multifamily demand is on the rise.
In 2005, multifamily starts hit 354,000 units before dropping to 112,000 in 2009. In the past three years, starts have doubled in the multifamily sector, hitting 260,000 units.
