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Bright Outlook for the Multifamily Market: Trends and Insights from the 2011 CREW Network Convention

At the 2011 CREW Network Convention, industry experts shared insights on the multifamily market's promising future. The driving force behind this optimism is the growing Echo Boom population and positive immigration trends, with 98% of recent job growth benefiting the 20-34 age group. As homeownership rates decline and sentiment shifts away from buying, a significant number of young adults are opting to rent, revealing strong pent-up demand. With limited new housing supply anticipated, the multifamily sector remains an attractive option for this demographic.

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Bright Outlook for the Multifamily Market: Trends and Insights from the 2011 CREW Network Convention

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  1. The Multifamily Market Today CREW Network Convention & Marketplace September 15, 2011

  2. Outlook for Multifamily Industry is Bright • Strong demand from growing “Echo Boom” population and positive immigration inflows • 98% of jobs created in the past 12 months went to the 20-34 age group • Homeownership rate declining steadily • Negative sentiment toward home ownership • Limited new supply of housing expected for next several years

  3. Favorable Demographics with High Propensity to Rent Over two-thirds of this age group choose to rent Actual Projected Source: Witten Advisors

  4. Pent-up Demand from Young Adults at Home Source: Witten Advisors

  5. Homeownership Rate Declining Actual 2Q11 65.9% Source: Witten Advisors

  6. Negative Sentiment Toward Home Ownership • Many people choosing to rent rather than buy • Moveout rates from apartment residents purchasing or renting homes have declined dramatically (23% peak vs. 11% in 2011) • Strong credit scores and significant down payments now required by mortgage lenders

  7. Housing Supply • Multifamily supply near historical lows due to tighter capital standards • Excess single-family home inventory doesn’t compete with well-located apartment homes • Vacant and foreclosed homes are located in remote areas and lack amenities offered by professionally managed apartment communities

  8. Multifamily Starts Source: Witten Advisors

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