The Demographic Trend Apartment Owners Need to Watch

Blog,

NAA recently interviewed economist Ryan Severino about what he’s seeing in the apartment market, and he had some interesting things to say about the demographic measurements that apartment owners should keep an eye on.

Here’s his reply to the question,

“What concerns do you have for the apartment market over the next couple of years?”:

Severino: Certainly, affordability is an issue. This is years down the road, but I wonder what happens when Gen Y is not the prime rental cohort anymore. What happens during that change over? Even though we make the blanket assumption that the propensity to rent isn’t going to change, the shrinking of that generational changeover from Gen Y to Gen Z will mean significantly fewer renters during that period, especially if Gen Y starts to transition a little more seriously out of renting into homeownership.

Because of that, I wonder what happens to some of these new apartment communities that are expensive because the land is expensive and material costs are expensive and labor is expensive. What happens to that stuff when you start to get a pullback as a demographic changeover occurs? That’s a little bit further down the road than just the next couple of years, but it’s something that I’ve been thinking about because of demographics.

Read the full interview here.