Silver as an investment

Record High Multi-Family Construction Set To Wreak Havoc On Apartment Rents

zerohedge.com / by Tyler Durden / Apr 14, 2017 4:10 PM

Softening apartment rents, particularly in the massively over-priced, millennial safe-spaces of New York City and San Francisco, have been a frequent topic of conversation for us over the past several quarters…here are just a couple of recent examples:

Now, a new report from Goldman’s Credit Strategy Team, led by Marty Young, helps to highlight some of the key data points that suggest that sinking rent will likely not be just an ephemeral problem.

To start, an just like almost any bubble, sinking rents are the symptom of a massive, multi-year supply bubble in multi-family housing units sparked by, among other things, cheap borrowing costs for commercial builders.  Per the chart below, multi-family units under construction is now at record highs and have eclipsed the previous bubble peak by nearly 40%.

Goldman

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