As indicated in M&M's "Apartment Research Report for Northern and Central New Jersey," "rising home prices and continued demand will help occupancy in the market remain stable into 2002," according to regional manager David Thurston. "Projections indicate that the market could tighten further in the long run, as the prime renter population is forecast to rise.
"Taken in combination, these factors are expected to maintain the health of the local apartment market for the foreseeable future," according to Thurston. Among the highlights of the M&M report:
To begin with, while job growth is expected to slow even further over the next 12 months, there will be expansion in some of the state's fringe counties. That's expected to contribute to an overall job gain of about 1.4%, which would mirror the national picture.
Also, the renting age population is expected to grow, according to a report, after declining in the period 1990-2000. "That should help tighten the local apartment market in the long term," according to Thurston.
At the same time, rents are expected to show modest gains--about 2.5%--through the middle of next year. Factors in holding down the overall increase include rent-controlled units and occupancy considerations. As Thurston points out, "many owners continue to sacrifice larger rent hikes in order to increase occupancy."
Finally, "the relative attractiveness of apartment properties over other real estate investments this year should spur increased sales activity," according to Thurston. "Although interest rates inched upward slightly in late May and early June, apartment product will be among the most attractive real estate investments over the next 12 months.
"With the stock market continuing to fluctuate wildly, capital is plentiful for solid multifamily investments," he concludes. "While rents and values are forecast to show only moderate gains over the next year, the potential for high returns exists for the well-informed investor.
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