Monday, October 26, 2015

Rental Math in the City of Anti-Construction Crazies

Morgan Stanley analyst Vance Edelson reports that construction data  shows the new apartment supply in SF is expected to increase by only 15,000 units in 2016-2017.

Right now, the forecasts point to 145,000 new jobs in the Bay Area. 145,000 new jobs versus 15,000 new units is a ratio of 9.4x.

Morgan Stanley calculated that in low home-ownership markets, like the Bay Area, a traditional ratio is four jobs for every apartment, or a 4x ratio.

In 2015, the job/supply ratio was 8.9x, according to the note.

So it's getting worse, not better.


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