The dynamics of the Multi-family market have been nothing but up for several years now. But change is in the wind. The first big change is a major study showing that one of the largest groups of renters is in the income range of $100,000 and up. This is a major population group that have chosen not to be home owners. Potentially this population could become a market for condominium conversions in the future.
Another group of multi-family residents are the millenials working in the Internet industry as typified by the office market and development of South Lake Union and the Amazon complex. Their income levels are indicative of their value in the market place and they are receiving preferential rental rates. This has led to a potential discrimination suit. Most of these millenials are white and the theory is that this preference is discriminatory and limits “affordable” housing.
The rapid increase in rents in the multi-family market is starting to slow as more units are coming on line. The bottom line is that it is a good time to be cautious and anticipate these factors in the market further exacerbated by the position of the Federal Reserve and their recent raising of interest rates.