Source: bisnow.com | Re-Post MNM Partners, LLC 3/1/2018 –
Silicon Valley’s multifamily market will continue to benefit from strong job growth that is propping up demand for housing as we enter 2018. The ongoing supply/demand imbalance throughout the region will continue to drive both ground-up development and renovation in old properties.
Silicon Valley is an ideal market for investment and redevelopment because the housing stock is 50 to 60 years old and can benefit from modernization, according to Calvera Partners Managing Principal Brian Chuck. Additionally, Silicon Valley offers good market dynamics, including a strong employment base with a highly educated workforce, barriers to entry and mass transit infrastructure, he said.
Continued job growth does not suggest any kind of pending collapse in the Silicon Valley apartment market, but dynamics will likely start to shift, Chuck said.
“To expect the next five years to mirror the growth of the previous five is unreasonable,” Chuck said. “It seems reasonable to expect rent growth to revert back to long-term historical rates and to expect demand, both on the tenant side and investor side, to remain strong.”