Over 56 developers, operators, and investors across the country were surveyed in John Burns Research and Consulting's recently-launched Apartment Developer and Investor Survey. The November 2023 report collected two month's of data to find clarity in the multifamily market, including capital access, lease-up challenges, and the overall development pipeline.
Overall, Burns has outlined four key takeaways for developers and investors to be mindful of in 2024.
Burns Apartment Developer and Investor Survey Takeaways
1. Apartment developers anticipate a dramatic decrease in construction and new starts
As post-Covid construction has peaked, developers expect new apartment starts to slow by 20–50%.
Forty percent of developers surveyed have over 500 units currently under construction. While a surge of projects will finish by 2025, future starts are believed to slow dramatically.
Nearly all respondents have found securing financing to be increasingly difficult.
2. Investors “sidelined” as interest rates create cautious lenders
Apartment transactions have come to a halt as financing tightens and pricing uncertainty grows. Only 16% of those surveyed reported selling an apartment property in the last six months, and 70% say they are not planning to purchase in the next six months.
There was little consensus on current pricing levels. A few respondents believe their assets are undervalued, while the rest are split between seeing their assets as fairly-priced or overvalued. According to Burns, this disparity reflects the ongoing disconnect between buyers and sellers.
3. Affordability is an important factor for residents of newly opened communities
A significant factor for resident retention is affordability. The research finds that the most common reasons tenants won't renew their lease is to move into a less expensive apartment or to move in with roommates instead.
Three-quarters (75%) of respondents are averaging double-digit monthly leases at unstabilized communities as well, indicating healthy lease-up trends.
4. Thoughtful design and amenities—especially service-oriented ones—must be superior
According to Burns, developers have underscored the importance of project design and high-quality amenities. Those surveyed indicated that new communities must have amenities that are in-line, if not superior, to the competition.
Some have also begun focusing less on physical amenities like pools and parks, and more on service-oriented amenities such as concierge services.
Click here to access the entire Apartment Developer and Investor Survey.
Related Stories
Affordable Housing | Mar 11, 2024
Los Angeles’s streamlined approval policies leading to boom in affordable housing plans
Since December 2022, Los Angeles’s planning department has received plans for more than 13,770 affordable units. The number of units put in the approval pipeline in roughly one year is just below the total number of affordable units approved in Los Angeles in 2020, 2021, and 2022 combined.
MFPRO+ Special Reports | Mar 6, 2024
Top 10 trends in senior living facilities for 2024
The 65-and-over population is growing faster than any other age group. Architects, engineers, and contractors are coming up with creative senior housing solutions to better serve this burgeoning cohort.
MFPRO+ News | Mar 2, 2024
Job gains boost Yardi Matrix National Rent Forecast for 2024
Multifamily asking rents broke the five-month streak of sequential average declines in January, rising 0.07 percent, shows a new special report from Yardi Matrix.
MFPRO+ News | Mar 1, 2024
Housing affordability, speed of construction are top of mind for multifamily architecture and construction firms
The 2023 Multifamily Giants get creative to solve the affordability crisis, while helping their developer clients build faster and more economically.
MFPRO+ Research | Feb 28, 2024
New download: BD+C's 2023 Multifamily Amenities report
New research from Building Design+Construction and Multifamily Pro+ highlights the 127 top amenities that developers, property owners, architects, contractors, and builders are providing in today’s apartment, condominium, student housing, and senior living communities.
Affordable Housing | Feb 26, 2024
Biden-Harris Administration announces historic homelessness assistance funding
The Biden-Harris Administration allocation of $3.16 billion in homelessness assistance funding will be administered by the U.S. Department of Housing and Urban Development through the Continuum of Care Program.
Designers | Feb 23, 2024
Coverings releases top 2024 tile trends
In celebration of National Tile Day, Coverings, North America's leading tile and stone exhibition, has announced the top 10 tile trends for 2024.
MFPRO+ Special Reports | Feb 22, 2024
Crystal Lagoons: A deep dive into real estate's most extreme guest amenity
These year-round, manmade, crystal clear blue lagoons offer a groundbreaking technology with immense potential to redefine the concept of water amenities. However, navigating regulatory challenges and ensuring long-term sustainability are crucial to success with Crystal Lagoons.
Building Tech | Feb 20, 2024
Construction method featuring LEGO-like bricks wins global innovation award
A new construction method featuring LEGO-like bricks made from a renewable composite material took first place for building innovations at the 2024 JEC Composites Innovation Awards in Paris, France.