What do you think about the author's contention that Multi-family demand should increase? How does tax policy inform your choice? What if the deduction for home interest would be eliminated?

Is Growth in the Multifamily Sector Sustainable? Nov. 13, 2013By Michael Bul The multifamily market, the so-called darling of commercial real estate, isn't losing that title any time soon. The third quarter demonstrated once again how stable the sector is, as occupancy held steady and rents continued to rise, albeit at a more normal pace. Those were a few of the points made during the most recent episode of the "Commercial Real Estate Show." My guests and I discussed the factors affecting the sector, property-level performance expectations and investment strategies for this point in the cycle. Millennials enter the job market The continuously improving economy and job market are sustaining the multifamily market's success. "The people who are getting jobs are the young professionals that typically rent an apartment instead of buying a house," said Ernie Eden, vice president of Bull Realty's Apartment Group. "Demographics are the key factor driving the multifamily market," said Jay Parsons, national market analysis manager for Real Page Inc. "The Gen Y Millennial renters will eventually buy homes, but not until later. They are getting married later and prefer the mobility that living in a rental gives." A large pipeline of upcoming college graduates will soon be looking for apartments as well, Parsons added. "Apartment demand should be strong during the next decade due to strong demographics." More normal occupancy and rent growth The multifamily market is on pace for a similar year to 2012 in terms of absorption and rental rates, Parsons said. In the third quarter, 47,000 units were absorbed nationwide for a year-to-date total of 163,000, he added. Rent grew by 1.1 percent quarter-over-quarter for total rent growth of 3.2 percent year-to-date. "We are getting back to a more stable multifamily market," Parsons said. "We are going from a peak market to a more normal growth pattern." While class-A properties lead the way coming out of the recession, class-B properties are experiencing an uptick in rents as well, he added