The future of the multifamily market will include disruption, advances in technology, and engineering challenges related to the ongoing labor shortage, industry observers said at the International Builders' Show (IBS) in Las Vegas last week.

“We used to be really great with hammers and nails. Now, we have buildings with brains,” said Jennifer Nevitt of Forty-Two LLC, a multifamily property management, development, and consulting firm based in Plymouth Meeting, Pa. “Our buildings have become so high-tech, we don’t have a labor force that can deal with that.”

Nevitt’s presentation at IBS focused on a wide variety of trends that are already influencing the industry, with more change predicted in the future. She acknowledged that the labor shortage is affecting not only the construction of multifamily buildings but also their operation, and she recommends tapping graduates from local colleges or trade schools that offer construction management on the curriculum. She also predicted that increasingly severe weather will continue to create havoc in the construction business and that the threat of tariffs has resulted in raising the level of contingency funds in a budget.

Nevitt likes using monitoring technology to help manage buildings, such as Leak Gopher, by Franklin, Tenn.–based Leak Intelligence, which can detect a leak in a building and turn the water off automatically, or devices from Lebanon, N.H.–based FreshAir Sensor, which can detect unauthorized smoking in a building, including of tobacco and marijuana. “It’s the only way to police,” she said. "Otherwise, we'd have to hire a full-time employee just to handle lease violations.”

To cut down on labor costs, Nevitt recommends paying attention to innovations like accessible pick-up zones for car-sharing services, backup electricity systems in case of an outage, and augmented-reality devices to show prospects apartments. “We figure it’s a 40-minute labor cycle to physically show somebody an apartment, and 70% don’t buy on the first visit, which leads to another 40-minute labor cycle,” she said.

Nevitt also points to digital detox spaces—tech-free zones inside a building that are dedicated to a phone-free experience, and coffee shops that can transform into a sushi bar in the evening via movable walls. Mirrors in the near future will be internet-enabled so that residents can practice their yoga poses, and closets will be so smart they'll help a tenant match outfits. She envisions vertical farming coming to high-rise buildings, especially product that features oversized patios.

Mail and package rooms are getting hipper and putting more onus on renters to retrieve their own goodies, and Nevitt likes Amazon’s locker service as another way to dial back labor costs. “Amazon will install lockers for free,” she said. “Our leasing agents were spending all their time delivering packages; we’re getting 100 packages a week for 350-unit buildings.”

Statement flooring appears to be another trend, along with circadian lighting systems. In upscale buildings, private panic rooms are popular, along with refrigerators that tell you when the food has expired. In the bath, showers with seats are desirable and sinks should be single basin and 14 to 16 inches deep. High-quality faucets are a must. Gas fireplaces are now a good idea, along with appliances that reveal when they're about to fail.

Of course, the lifeline connecting all these bells and whistles in terms of bandwidth can't be ignored. “We’re now connecting units with 1 gig of fiber per home, when it used to be 1 gig for the whole property,” said Nevitt. “We offer 30% of that speed for $69 and they pay extra by volume for the gigs used, so we don’t turn it on for everybody.”

Nevitt also likes to imagine that, one day, owners and operators will be able to use an app to rate their renters, but, so far, that is still a ways off.
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This article first appeared on the website of MFE sister brand BUILDER.

Split Your Space
Room dividers are a great way to split your space up and create temporary partitions. This can be especially useful in a studio apartment, or in a room that feels too large and empty. Don’t let your living space have that vacant feeling by creating the layout that suits you.

Add Some Greenery
House plants, herb gardens and vegetable patches are all excellent additions to any living space and can create a really homely atmosphere. They look fantastic, freshen your air, and you can use some of the plants in your cooking.

​Lighting Statement
Don’t like that musty old lampshade? Swap it out for something more to your taste, and consider making a feature of a really special piece. When your lease is up, simply swap it back and take your personal light fitting to your new place.

Go Large on Art
Can’t hang pictures or photos on your walls? Go large and order huge, framed prints. These can be simply leaned against a wall, making a beautiful statement and providing an eye-catching focal point. [You can also use Poster Putty ​to hang photos and prints!

Removable Wallpaper
Removable wallpaper is affordable, easy to install and easy to remove when it’s time to move on. Plus, it comes in a huge variety of colours and patterns, allowing you to liven up your rental space and put your mark on the place.

Make the Most of Surfaces
Since most landlords prevent you from drilling holes in the walls, you might find yourself short of shelf space. Make the most of the surfaces available and use them to showcase things like art, decorations, and books. Window sills, tables and even fridge tops can all house a variety of objects.

Simple Storage Solutions
If your rental is short on storage space, you might need to think outside of the box, especially in the kitchen. There are several simple storage solutions you can use around the home, many of which pack up and can go with you wherever. A step ladder is a great place to store anything from pots and pans to bathroom accessories and books. A pegboard with hooks is another great solution for storing kitchen utensils, pots and pans.

​Curtains and Drapes
If you can’t paint your walls, you can add color to your rooms with drapes and curtains. Choose colors that add a little of your personality to the place. Patterned curtains can also be a great way to liven up an otherwise bare space.

 Fit a Removable Headboard
There’s nothing better than slipping into bed after a long day, but some landlords consider headboards to be optional extras and don’t think the bed they offer you needs to have one. However, you can always make your own to brighten up your rental, and they’re easy to move from place to place.

Splash Some Color in the Bathroom
Most rental apartments have been decorated in fairly neutral tones, with white bathrooms being the norm. Make yours less monochrome with colorful shower curtains, roman blinds, towels, toilet seats, shower mats, etc.

Take Advantage of Windows
Windows are of course a great source of natural light, and can easily become the focal point of a rental apartment. Treat them well, and add decor on the window sill that will take advantage of the light flooding in. Coloured glass jars and vases are a nice touch and add vibrancy to otherwise dull areas.

View original article by Andra Hopulele with Point 2 Homes here

There’s no doubt about it: the 2018 housing market has seen its ups and downs.
The year started with sky-high home prices, historically low mortgage rates and a definitive upper hand for sellers. In recent months though, home price growth has faltered, rates have risen to their highest point in nearly eight years, and favor has started to shift from seller to buyer.
Will these trends continue? Will housing experience the same wild ride in the new year? Here’s what experts predict will happen in 2019 real estate market:

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Mortgage rates will continue rising.
“Despite steady climbing for the past two years, mortgage rates remain lower than they were during most of the recession and below average for the type of strong economic growth we’ve been experiencing. That will change in 2019, as the 30-year, fixed rate mortgage reaches 5.8% — territory not seen since the dark days of 2008 when rates were racing downward in response to the housing crisis.” — Aaron Terrazas, director of economic research for Zillow

Millennials will keep buying homes — despite those rising rates.
"The housing market in 2019 will be characterized by continued rising mortgage rates and surging millennial demand. Rising rates, by making housing less affordable, will likely deter certain potential homebuyers from the market. On the other hand, the largest cohort of millennials will be turning 29 next year, entering peak household formation and home-buying age, and contributing to the increase in first-time buyer demand.” — Odeta Kushi, senior economist for First American
“Millennials will continue to make up the largest segment of buyers next year, accounting for 45% of mortgages, compared to 17% of Boomers, and 37% of Gen Xers. While first-time buyers will struggle next year, older Millennial move-up buyers will have more options in the mid-to upper-tier price point and will make up the majority of Millennials who close in 2019. Looking forward, 2020 is expected to be the peak Millennial home buying year with the largest cohort of millennials turning 30 years old. Millennials are also likely to make up the largest share of home buyers for the next decade as their housing needs adjust over time.” — Danielle Hale, chief economist for Realtor.com

Home buying power will decrease, but that could be a good thing.
“Most homebuyers budget a monthly payment. As rates rise, a fixed monthly payment translates into less borrowing capacity and buying power is down about 10% since the same time last year. As there are less buyers at each price point, the appropriate market response is a slowdown in sales and an easing in price momentum.” — Tendayi Kapfidze, chief economist for LendingTree
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Overall home sales will drop.
“As we look toward 2019, we are anticipating home sales to decline around 2%. We’re expecting it to be another slightly slower year as buyers continue to wrangle with higher mortgage rates after contending with several years of rapid price growth.” — Ruben Gonzalez, chief economist at Keller Williams

Inventory troubles will ease — not too much, though.
“The wave of first-time home buyer demand will be met by somewhat higher inventory levels than in 2018. However, while the days of multiple offers and bidding wars may be history in some markets where inventory is increasing, inventory will likely still remain tight nationally through 2019." — Kushi
“In the majority of markets, the number of homes being put on the market or newly constructed has increased slightly, while the pace of sales has slowed slightly, which has helped stop the inventory decline. But the inventory increases or slowing price increases necessary for a more widespread sales gain are not forecasted to happen in 2019. While the situation is not getting worse for buyers, it’s also not improving notably in the majority of markets.” — Hale

Home price growth will continue to slow.
“Right now, for 2019, we believe home price appreciation will likely slow to near 3%. This is based on the assumption that the recent pattern of increasing inventory levels will be sustained in the upcoming year.” — Gonzalez
Buyers will see less competition, but that might not help first-timers.
“Buyers who are able to stay in the market will find less competition as more buyers are priced out but feel an increased sense of urgency to close before it gets even more expensive. Their largest struggle next year will be reconciling wants, needs and budget versus the heavy competition of 2018. Although the number of homes for sale is increasing, which is an improvement for buyers, the majority of new inventory is focused in the mid- to higher-end price tier, not entry-level.” — Danielle Hale, Realtor.com
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National rents will rise, but apartment construction could ease renters’ pains.
“As higher rates limit the number of homes that potential buyers can afford, some would-be buyers will be too financially stretched to buy and will continue renting. As a result, recent (and very slight) drops in rent will reverse and turn positive again. The shift will be muted, however, by continued steady investment in apartment construction, which will prevent rent growth from shooting too far above income growth.” — Terrazas

NYC rent hikes will continue — thanks to Amazon.
“Overall, I think the beginning of 2019 will be relatively flat, with price increases in Q3, Q4 and into 2020. The period between the old 421A and the beginning of affordable New York was a window of time where there wasn’t a tremendous amount of rental development. During that time it was difficult to build rental developments due to the escalating land and construction costs, no tax incentives, etc., creating a shortage of new product. Today, not only have some regulations changed, but the economy is doing well, unemployment rates are down, a lot of jobs are being created here in New York – not only by Amazon but everything that comes along with Amazon and all of the corporations looking to be close proximity to their headquarters. When we see the economy doing well, we can expect rental prices to increase.” — Andrew Barrocas, CEO of MNS

Individual and institutional investors will battle it out.
“Well-funded institutional buyers have tremendous advertising budgets and their spend makes it impossible for the average real estate investor to compete. It takes a serious financial investment to fund a marketing campaign that accurately targets and identifies acquisition opportunities. That alone gives institutional investors an instant advantage. Additionally, interest rates are increasing, which not only impacts buyers who cannot afford to move, but also individual investors looking to borrow money to buy and hold rental properties. Their cost to borrow increases while inventory decreases and competition grows. This type of combination middle-market is one individual investors do not want to see.” — Brian Spitz, founder of Big State Home Buyers
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Commercial property managers will hop on the shared space bandwagon — or bring in top amenities to make up for it.
“As co-working continues to be a disruptor in commercial real estate, the largest traditional landlords have opened their own flexible and co-working options to compete, such as Sage Realty's Swivel and Boston Properties' Flex. Landlords who are remaining or returning to the traditional commercial office space are facing increased demand for amenities like sleek lobbies, tech services, etc. To meet these demands and gain a competitive edge, landlords are opening up to fintech/insurtech solutions like replacing security deposits with surety bonds to make tenants lives easier.” — Julien Bonneville, CEO of The Guarantors

Technology will continue to disrupt the industry.
“Technology disruption of the real estate industry driven by Silicon Valley and institutional investors will reach a point where it’ll threaten the traditional real estate industry. Technological innovation is here and rapidly advancing in the real estate industry and preparing for disruption. iBuying, blockchain, artificial intelligence and machine learning are changing the ways buyers, sellers and investors interact with each other and the properties they are interested in.” — Spitz

​The Moral of the Story
All in all, housing is set for a slow-down next year, but as Kapfidze explained, that’s not necessarily a bad thing.
“The medium and long-term prospects for housing are good because demographics are going to continue to support demand,” he said. “With a slower price appreciation, incomes have an opportunity to catch up. With slower sales, inventory has an opportunity to normalize. A slowdown in 2019 creates a healthier housing market going forward.”

They are tech dependent.
These digital natives have never known a world that isn’t completely, immediately connected. They want every aspect of life to be easily accessible through their smartphones. This means as a landlord or investment property owner, you need to take a close look at how you’re interacting with your tenants. They will demand electronic interactions for regular tenant activities like paying rent, filing maintenance requests, basic communication with the landlord and accessing services like purchasing renters insurance.

They are frugal.
A recent Business Insider survey showed that, even though this generation is still very young, some already believe that one of the most important issues that they will have to deal with is the economy and debt. Because they have grown up during a global economic crisis, and in the shadow of the relatively “poor” millennials, they will tend to worry about money. This mindset might make them value affordability over extra square footage or unnecessary amenities.

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​Affordable? Check. Spacious? Not so much — but this renter packs the personality into an antique rental in the heart of Seattle.

Mountain States Appraisal's Moe Therrien presented the following update at the 2018 IREM (Institute of Real Estate Management) Multi-Family Housing Luncheon utilizing information compiled by Valbridge Property Advisors.  Occupancy remains very high while vacancy rates continue to fall.  With the tremendous growth we are seeing and record numbers of new residents, this is a trend that promises to continue.

The NMHC, in partnership with the National Apartment Association, recently launched the Vision 2030 campaign. This new educational and public relations effort focuses on the strong and growing demand for apartments from now through 2030.
One of the program’s foundational pieces is a new research report, produced by Hoyt Advisory Services, that offers a serious, academic examination of the factors that will drive the sustained demand for apartments over the next 13 years.
Here’s the upshot: We’ll have to build 4.6 million new apartments between now and the end of 2030 to keep up with growing apartment demand—or risk exacerbating today’s existing housing shortage.
That means delivering an average of 325,000 net new units each year, after accounting for the estimated 125,000 units or so we lose every year to old age and obsolescence. For comparison, the industry has averaged just 225,000 completions per year over the past five years, which have been some of the most robust many of us have seen in our careers.
Increasing production in step with estimated demand is a giant challenge. While there will be jurisdictions that will be more accommodative of the kind of growth and development needed, there will be others where this will be hard to achieve.
Barriers to Construction
As part of our research, we also released the Barriers to Apartment Construction Index for 50 metro areas. Taking into consideration local regulations, available land, and other factors, this new tool scores the metro areas by difficulty of building new apartments.
The index ranges from 19.5 in the most-difficult market in which to add apartments (Honolulu) to -5.9 in the easiest (New Orleans). Any score above the median of 1.8 means it’s harder to add new apartments in a specific metro compared with other metros.
But it isn’t just the labyrinth of local regulations and policies (such as land-use restrictions, zoning laws, entitlement processes, fees, and so on) that stymie the production of apartments. Just as problematic can be NIMBY opposition. These antigrowth proponents can be vocal and aggressive in blocking development and redevelopment if they feel new development threatens their way of life.

And the NIMBY pressure can be intense. Even well-intentioned policymakers, including mayors, city council members, and the like, often retreat from sensible plans to make their jurisdictions more livable and attractive to new businesses and workers because the level of NIMBY noise is overwhelming.
Ironically, once a new apartment community manages to make it through the often excruciating approval process, frequently these same antigrowth zealots are among the first to line up for apartments for their children. While they oppose affordable housing for their communities’ vital workers—teachers, first responders, health-care workers, retail and restaurant employees—they also hypocritically want their children to have access to apartments that are both affordably priced and reasonably close to home.
This exclusionary mind-set, which some go so far as to call “dream hoarding,” is detrimental not only to housing affordability, but also to communities’ fundamental social and economic health. In fact, it has already crippled many cities across the U.S., most notably in California, where NIMBYism has successfully created a huge disparity between the supply of and demand for affordable rental housing.

Partners for More Production
But even in localities where harmony exists between apartment developers and local residents, the magnitude and complexity of the challenge of meeting the upcoming demand for apartments is still too big for the private sector to take on by itself. We need the local, state, and federal governments to be our partners in meeting the growing apartment need.
To provide a starting point for discussion and collaboration, we’ve also published the Vision 2030 report, which presents a toolbox of approaches that states and localities can use to address the apartment shortage and help reduce the cost of housing. The toolbox presents four broad strategies:
(1) Adopt public policies and programs locally to make housing affordability more feasible. From “by-right” development and expedited approvals to reduced parking requirements and density bonuses, there are a number of policies and best practices that can help keep apartment development costs down. 

(2) Increase public–private partnerships. Policymakers can provide incentives such as tax abatements or share risk with the private sector to produce the necessary units at price points households can afford.

(3) Leverage state-level authority to overcome obstacles to apartment construction. Sometimes this difficult process needs a boost, so some states, including Massachusetts, Rhode Island, and Oregon, have begun stepping in to override local zoning restrictions that inhibit apartment construction.

(4) Collaborate with business and community leaders to champion apartments. Without a diversity of housing options to meet a variety of lifestyle needs and price points, local economies will suffer. Local employers and community leaders need to be engaged to create a powerful force against NIMBYism.
Cities and communities that embrace this more-collaborative, we-all-win-together mentality will be the most successful in creating an environment where we can build enough new apartments to meet the need going forward. The repercussions of inaction on this front are great; if nothing is done, housing affordability constraints will continue to hold back our local, state, and national economies. A healthy housing market is critical for attracting both new businesses and new workers to communities.
For more information on this campaign, as well as access to apartment data by state, 50 metro areas, or congressional district, please visit www.WeAreApartments.org. The site also features the NMHC’s Apartment Community Estimator, an online calculator that values the economic impact of building and operating apartments in local communities, and printable fact sheets for your next meeting with local officials or state or federal lawmakers. 

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