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Coming off a strong and surprisingly consistent year in 2018, we’re feeling good about 2019. The year is off to an interesting start, to say the least, and we’re keeping our eye on several factors. These include Treasury rates, the regulatory environment, tariffs and development costs that will impact our business. Even keeping these in mind, however, there are positive factors that point to the potential for continued economic strength and activity in the multifamily market.

Fundamentals of the Economy Remain Very Strong

Unemployment continues to fall, and jobless claims remain extraordinarily low. Despite the recent decrease in consumer confidence — volatile in its own right — it remains near the highest levels since 9/11. GDP growth also remains strong with consumption, investment and government outlay all supportive.

Multifamily Demand-Supply Dynamics Remain Solid

The percent of the population living in multifamily units has experienced a slow, but consistent, increase since the 2008 financial crisis. Loan maturities are expected to increase in 2019 versus 2018 across several sources. Maturities are inevitable events that require some form of activity, be it a sale or refinance. The rise in mortgage rates at the end of last year slowed activity in the for-sale, single-family market. This hesitancy provided an unexpected boost to the rental market. We may very well see a similar pattern this year.