There are many reasons why the multi-family market in St. Louis is thriving these days. One of the biggest? The volatility of the housing market.
That’s the thought, at least, from the researchers at Marcus & Millichap. The company recently released its second quarter 2012 apartment research report for St. Louis. And, not surprisingly, the researchers behind the report found plenty of positive news to report regarding the multi-family market in this key Midwest city.
The Marcus & Millichap report cites soaring housing foreclosure rates in the counties of St. Charles, Jefferson and St. Louis as forcing a growing number of families out of the single-family market and into the rental arena.
This a shift not unique to St. Louis, though. Everywhere from Minneapolis to Topeka, Omaha to Cleveland, we’re seeing high foreclosure rates forcing families to turn to renting.
It’s not certain if this is good news for the country or for the economy. Families that have lost their homes to foreclosure aren’t likely to make many big purchases, at least not for several years. And that’s certainly not something that will provide a boost to a national economy that’s still far too sluggish.
But the shift to renting is good news for any commercial real estate pros who specialize in the multi-family market.
Just look at the news from St. Louis.
According to Marcus & Millichap, 2012 should see builders bring 750 new multi-family units to the St. Louis area. That’s much better than during the last five years, when apartment stock has been added to this market at a rate of about 280 units a year.
At the same time, vacancy rates in the St. Louis multi-family market are expected to fall 60 basis points to 5.8 percent in 2012. And asking rents should rise 1.8 percent to a record high of $737 a month in the St. Louis area this year.