How Much longer can this bull market continue?
I recently attended the annual Multi-Family Summit hosted by the New England Real Estate Journal and the Economic Summit hosted by Dicicco, Gulman & Company LLP. Many of us in the multi-family space continue to ask the same question, “How much longer can this bull market continue?” According to both panels, the outlook for 2018 could not be better; some have suggested that it could be one of the best years ever!
This great economic expansion is expected to continue. There are no signs of excess in the markets, consumer and business confidence is high, unemployment rates are low and wage growth is up by 2.5-3% nationally, and expected to pick up. Already, this is the 3rd largest economic expansion in American history; some anticipate that this 8 year expansion could become the largest economic expansion ever! Many of us believe that due to the changes characteristic of the Millennials and how they live, spend, and work; that our economic forecasting abilities leave us in uncharted waters. Millennials those born between 1980 – 2000, ages 17-37 consist of 92.5 million people nationwide. For example: As of 2016’, only 69% of millennials drive automobiles. They have the highest rate of college degrees. They grew up with the internet. And their online spending habits have nearly obliterated the retail sectors and reinvigorated the industrial sectors beyond belief. Boston is considered a millennial city; they consist of 30% of the population, which exceeds the national average by 2%. In an interest to work where they live, lifestyle centers are forming in the suburbs around Boston.
In closing, the demand for rentals in Boston and nationwide continues to be strong. Even with recent available new inventory, absorption rates appear healthy and strong. Consumer and business confidence is high and the S&P index continues to rally. The economic expansion is expected to continue and the multi-family sector is expected to be strong. The largest working population, millennials, continues to positively impact our economies, both local and beyond. They are educated, mobile and resilient; they require smaller living spaces located in metropolitan cities, where they prefer to walk or bike to work. They hold professional jobs and have discretionary income, to live and spend at their choosing. It is clear, they will continue to positively impact changes in our markets.