Apartment building market tanks?

[Sid23]

What would the world have to look like for the apartment building market to become undesirable?

Other than sky high interest rates (which would make capital hard to obtain, however, would probably cause the number of renters to rise), what types of things does one have to be aware of?

With changing demographics, it seems that there will always be at least 1 market in the US that would make sense to invest in...

I suppose a full-out recession where people are not moving and squeezing 10 people into a unit would be a bad time...

Interested to hear people's thoughts....

 

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[SteveO]

You certainly want to hedge your bets by looking to areas that will have less impact if the economy goes into a recession. There are risks to anything. I had to hunker down during the last slowdown and did not spend as much money on the properties that needed to be spent. When the economy got better, I started spending again. Apartments were on sale during that time and I bought a bunch.

 

[Sid23]

If the following were to happen in every major market:

- Interest rates drop
- Housing inventory increases
- Housing prices collapse (related to above)
- Population decreases
- Incomes rise

then you would have the possibility of the apartment market collapsing.

JScott, you are saying "all of those things" must happen for the apartment market to crash? It would take that many things?

I had to hunker down during the last slowdown and did not spend as much money on the properties that needed to be spent. When the economy got better, I started spending again.

What did the world look like during the last apartment slowdown?