Peak Renter

Demographics are now somewhat less favorable, and the move “from owning to renting” is mostly over. Multi-family construction peaked in June 2015 (as I noted at the time), however more supply than demand has still been coming online.

Today, from Laura Kusisto at the WSJ: Banks Retreat From Apartment Market

Swelling supplies of apartment units are prompting big banks to pull back from new projects, forcing developers to scramble for capital, in a sign that the U.S. apartment industry headed for a downturn. … fresh supply is beginning to overwhelm demand. More than 378,000 new apartments are expected to be completed in 2017, a 30-year high, according to real estate researcher Axiometrics Inc.

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So back to drawing board. Should I buy multi-family apartments or not? :thinking:

Wait! I thought that was the liberals/NIMBYs fault?

Oh, it’s the banks! :stuck_out_tongue_winking_eye:

Response coming at 1…2…3

Even I am confused on this issue. I think about this many times whether to continue real estate investing or stop it !

It depends on what you want to achieve? Cash flow? Multiplex gives higher cash flow than SFH .Bay area multiplex prices are as crazy as SFHs ! If you decide to buy multiplex, better buy at good location, easy to rent, likely good appreciation and easy to sell.

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Bullshit…There are not enough housing units period…Sfhs or mutli family there is an extreme shortage, especially in the BA

To my knowledge, 1980 real estate crash is the result of too many buildings for apartments and rental homes. Unlimited funding to builders resulted that crash.

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We are going to die but we’ll never see builders getting ahead of times. I said it many times in the other forum, like investing in RE, builders are one too many and they lose sight of the situation, they always react too late to make good $ out of the situation. When they realize they should be building lots of unites, they do it, but end up too late.

It’s always that way, it’s human nature, distrust sets in, you get immobilized by fear of losing, but when you see out there everybody making a buck, you react too late.

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The1980 real estate crash was due to 18% interest rates…Sure they overbuilt in exas…But they never overbuilt in the BA…they can’t. …the nimbys won’t let them…

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Wasn’t 1980 when they changed the allowable depreciation schedule for rental real estate? There was a huge crash when that happened.

If renters start buying en masse, many of the newer apartment buildings will just go condo. That’s how it usually works, except in SF maybe it’s politically harder? In other cities that will happen.

For example, I know someone living in a newer Berkeley apartment that was originally constructed as condos around 2008. They decided the market wasn’t right and rent it out, but every lease says they reserve the right to kick everyone out and sell condos. The renter gets right of first refusal.

It happens like this instead of conversion