By Aspire Economic Development + Chamber Alliance | | 12.21.23
Gabrielle Rubenstein, Land Acquisition Manager at Buckingham Companies,
notes the overall housing supply shortage, anticipating a steady absorption of recently delivered units, particularly in Johnson County, fueled by its desirability and strong rental demand.
“We’re continuing to move on deals that make financial sense and are looking forward to starting several new construction projects in 2024,” said Rubenstein. “I expect 2023 to finish out without many more new multifamily construction starts.”
“I would expect Johnson County to still have multifamily construction starts and a steady pace of absorption due to it being a highly desirable submarket to live in Indiana,” Rubenstein added.
“Its strength in schools, amenities, parks, and proximity to employers, coupled with increasing for sale home prices, will continue to fuel rental demand. The multifamily projects that have recently delivered in Johnson County have seen great absorption, which is a testament to the demand and desirability of the area,” she said.
Addressing market challenges, Rubenstein acknowledges the impact of higher interest rates and construction costs on project viability.
“There is still an overall housing supply shortage in the country so the demand for units is present, but I expect less multifamily construction starts in 2024 due to the challenging macroeconomic conditions,” Rubenstein said.
Rubenstein sees the challenges in the market as not specific to Johnson County, but more to the overall macroeconomic climate. With higher interest rates and construction costs that have not come down to pre-pandemic pricing, projects have a harder time getting financed.
“Banks have much larger portfolios of commercial real estate loans, so they are much more selective in what real estate projects they will underwrite,” said Rubenstein. “Banks want to see high quality projects in great locations with a strong developer. Across the board, it is taking more creativity and sharpening of pencils to get projects to the finish line.”
Challenges aside, Rubenstein says that the multifamily market in general sits in a good spot due to the overall housing shortage.
“As it relates to the Johnson County market, it has a vast number of strengths as it is such a desirable place to live. The school systems rank top in the state, there are quality jobs in the county and easy proximity to jobs in Indianapolis, great community amenities and parks, and low crime. Ultimately, these factors will continue to drive a strong rental housing market.”
Read the full article at Aspire Johnson County