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Where is the 2011 multifamily market and residential rental market going in 2010 | International Residential Real Estate Investors Association
Wednesday January 24th 2018

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Where is the 2011 multifamily market and residential rental market going in 2010

Its the time of year to take a swing at trends.  Perhaps this attempted look in the crystal ball will be useful to you.

Rental ownership cements its market position as the place to be for investors.  This is especially true for existing stock.  The pressure on commodities will create a value enhancing rental spiral that will not be offset by the glut of foreclosures.

  1. Rates begin moving upward slowly at first and likely accelerating toward year end.
  2. The dollar stiffens and begins rising slowly against major global trading partners inspite of the unprecedented cash inflows of QE2 and the year end tax agreement.
  3. Chinese, Brazilian, Indian Currencies rise creating import inflation.
  4. U.S. based manufacturing continues to strengthen.  By year end 2010, markets begin to recognize the U.S. faces steadily improving long term manufacturing pressures created by a weakened union environment, strengthening markets abroad compared to developing markets, and improved competitiveness of the U.S. labor force.
  5. The accelerating global economy creates further inflation pressure.
  6. Wage inflation remains muted throughout the year because of the huge glut of unemployed.
  7. Energy prices rise sharply through mid year and flatten perhaps for the long term as substitutes begin to slowly erode demand growth globally as supplies catch up because of increased commodity pricing.
  8. The U.S. economy accelerates to 200,000 new jobs per month by year end and possibly on average for the year.
  9. New home construction adds 500,000 to 600,000 units of all types.
  10. Foreclosures easily exceed 1,000,000 units.
  11. Consumers continue cutting debt of all types driven by tighter (but possibly easing) lending requirements for all installment purchases and loans.  On a percentage basis debt levels fall.
  12. Consumer debt totals begin to rise at a low rate as a result of more people with more money (fall out from increased hiring).
  13. The rental market strengthens systemically as development decisions face a decade or more of constraint ahead.
  14. In the U.S. and globally, central city / employment centered housing is a winner in a world of increasing commodity and energy prices.  Fitting more people into existing stock is a winner for investors and renters for the foreseeable future.

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