The Calculated Risk blog provides insight on the apartment market. It makes this statement:
This favorable demographic (the number 20 - 34 year old people (prime renters) is expected to stay high through 2030) is a key reason I've been positive on the apartment sector for the last several years - and I expect new apartment construction to stay strong for several more years.The construction of new apartments, as well as seeing vacancy rates close to the bottom, may mean cap rates are near a low, as multifamily buyers have more options. This may be one reason Blackstone, which has been a big seller of various real estate asset classes this year, is looking to buy apartments. Here is a Bloomberg article on Blackstone's new apartment venture, LivCor. Apparently, Blackstone sees the growing demand and the new supply as opportunities.
New supply will probably increase by 250,000 to 260,000 units this year - and increase further in 2015 since it can take over a year from start to completion for large complexes. Note: This doesn't include houses converted to rentals - and that is a substantial number in recent years.
This suggests new supply will probably balance demand soon, and that means vacancy rates are probably close to a bottom.