Apartment stocks set to cool after 2014 boom?

[jeepster]

Including dividends, apartment REITs returned 39.7% in 2014, the best among all real estate sectors, according to Nareit, which says REITs overall returned a still-pleasing 28%.

REITs in general have cooled of late - off 1.7% in February, with apartments off 1.1% as some analysts ring the register.

Morgan Stanley's Haendel St. Juste says slowing growth combined with pricey stock prices isn't the best combination. He notes the names are trading at 10-15% premiums to NAV vs. 10-15% discounts one year ago.

Then there's oversupply, especially in company towns like D.C. and in the Texas oil belt. Over the past six months, builders have broken ground on multifamily apartments at an average pace of 357K units per year - 26% more than the 30-year average.