This year Zillow hosted Asia Pham of SMC at their 2 day Multi Family Real Estate conference in Los Angeles. The conference covered all aspects of Multi-Family property management such as marketing and ownership. Guest speakers included entrepreneur and woman business icon, Gwyneth Paltrow, among other notable real estate industry leaders like Zillow’s Dr. Skylar Olsen, Director of Economic Research and Outreach.

Dr. Olsen spoke on multifamily real estate market trends and touched on the big questions that’s been looming among those who manage properties like “Are new buildings filling up?”, “Will vacancy rates in older buildings increase?”, “Will rents decline?”.

As more units are becoming available on the market now more than ever before, we believe the importance in paying attention to the current market trends so we can better serve our investors. We’ve rounded up Olsen’s main points below:

– We’ve had a huge building boom in multifamily rentals; as permits for single-family construction have reached historic lows, permits for multifamily construction have reached historic highs. But most of the development is a similar type: large buildings centered in downtown urban cores.

– Multifamily communities that have come online have largely catered to the urban professional. That’s been appropriate given current demographics; 20- to 24-year-olds make up the nation’s largest five-year cohort.

– As younger millennials age, they’ll start getting married and having families. When they enter their early 30s, they’ll likely want to buy a single-family home but won’t necessarily be able to do so due to low supply and higher cost. This means they’ll stay in the rental market much longer, but the rental stock we’ve built over the last few years will no longer cater to them.

– There are still many opportunities for growth in the rental industry. Think a decade or so ahead, and brand yourself as a place for families. This is where rent pressure will be. Make units where it’s comfortable to share living spaces. Build alternatives to the standard multifamily units that have come online recently.

This article is based on a presentation by Zillow Group’s Dr. Skylar Olsen, director of economic research and outreach, at Multifamily Forum 2018.