Reis' Severino Discusses Flood of Luxury Apartments on Bloomberg
NEW YORK (TheStreet) -- Luxury apartments are "piling up" in cities, which is good news for renters looking to buy at a lower price but bad news for developers, Bloomberg's Matt Miller said on "Bloomberg Markets" Wednesday.
"Rent growth has started to taper off" in urban markets, forcing "developers to take a pause," Miller continued.
As apartment supply floods the market, "it takes a little wind out of landlord sales," which in turn makes living more expensive for tenants too, REIS Chief Economist Ryan Severino commented.
REIS provides data on commercial real estate properties, transactions, markets, submarkets and performance.
Luxury apartment rent sales are sharply down compared to this time last year in the leading markets, such as New York City, Houston, Denver, Portland and San Francisco, according to a Bloomberg chart.
"A lot of the markets that were the leaders in this recovery are now kind of grappling a little bit with this, I wouldn't call it a supply glut, but more supply than we've seen in the last five, six, seven years," Severino explained.
New York City is a slight exception as it "attracts a buyer pool that is a little bit different than you see across a lot of the country," he noted.
New York luxury rent sales dropped around 5% year-over-year, less than the other cities, because of its large institutional base, high net worth investor base and an international base of customers, Severino stated.
Overall rent sales are not declining as rapidly on a quarter-by-quarter basis, Severino added.
When luxury rent growth went as high as 5% last year, "the bloom was off the rose there a little bit," he concluded.