CNBC's Diana Olick takes a look at second-quarter earnings from REITs Equity Residential (EQR), AvalonBay, Essex, and UDR to note that the second half of 2016 may not play out the way the multifamily industry expected.

While rents continue to grow in most major metros, there's been some significant softening in New York and San Francisco, two of the major markets EQR plays in—and the reason the Chicago-based REIT missed the Street's expectations this past quarter.

"Clearly 2016 will not turn out to be the year we had originally expected, due to deteriorating market conditions in San Francisco and New York City, which combined made up 50 percent of our initial growth forecast for the year," Equity Residential CEO David Neithercut said on a quarterly earnings call this week. "These markets have turned to become quite volatile."

"This trend appears to be largely demand-driven as economic and job growth fell short of expectations for the first half of the year, and declining business confidence and investment no doubt was a contributing factor as recent uncertainty and global events have left businesses hesitant to make new commitments," AvalonBay CEO Timothy Naughton said on the company's earnings call this week.

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