March 30, 2022

Multifamily Real Estate Market Analysis with Carl Whitaker

58 minutes

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Carl Whitaker is a Market Analyst for RealPage, Inc., where he blends in his passions for geography and teaching to foster a practical, applied understanding of apartment data and analysis. He specializes in creating in-depth reports and presentations to allow for easier consumption and application of data and analysis. Prior to joining RealPage, Carl was a Market Analyst for Axiometrics and an analyst for Catalyst Commercial, a Dallas-based economic development solutions firm.

In this Peak Market Watch episode, Carl Whitaker, the Director of Research & Analysis, RealPage - Nationwide market intelligence for multifamily owners and investors, joins Peak Market Watch host and CEO of Peak Financing, Anton Mattli, and Disrupt Equity Principal and co-host, Ben Suttles, as he shares an incredible multifamily market analysis on where we are at today and what the projections are for the rest of 2022 and beyond.

Here are a few highlights on what he will cover in this episode of Peak Market Watch:

Nationally, multifamily unit absorption in 2021 was 60% greater than the previous annual peak dating back to the 1990s!

COVID-19 certainly caused the pent-up demand in 2021.

Trade-outs: New leases in January 2022 were up 18% from expiring lease & renewals were up 10-11%!

Record rent growth was a combination of a catch-up from no to little increases in 2020, jump in demand, as well as inflationary pressures

Rent growth is expected to continue in 2022 but not at 2021 levels

Multifamily permitting did not reach pre-Great Recession levels until 2014

Affordability A Class properties: Rent to income ratio is typically in the upper teens %

Affordability B Class properties: Rent to income ratio is typically in the lower 20s %

Affordability C Class properties: Rent to income ratio is still just at around 27-28%

In summary, at a broad level, affordability is still not a significant issue at investment grade/professionally managed properties despite significant rent increases

Delinquencies: Even during the depths of the 2020 downturn, collections were down by just 3% compared to pre-pandemic levels whereas Class C assets showed more challenges, particularly in markets that implemented renter protections.

No expectation of an eviction "tsunami"

Expense pressure has been very strong, particularly due to increases in payroll, insurance premiums, and property taxes

Tight and innovative asset and property management will be crucial to keep expenses at bay - technology solutions are key to cut costs without cutting service quality

Loss-to-lease: Still a good amount of runway to increase rents, particularly in certain sunbelt markets with record low vacancies such as Florida

Sunbelt markets: There is an increased interest to rent in urban areas but that does not come at the expense of suburban markets - the demand is still so strong that both suburbs and urban centers in the sunbelt markets are benefitting for such demand

Large Markets you should be watching: Raleigh Durham, NC - Mid-size market: Cape Coral, FL - Small market: Ashville, NC

Connect with Anton Mattli

CEO of PEAK Financing

[email protected]

https://peakfinancing.com/

Connect with Ben Suttles

Principal, Disrupt Equity

[email protected]

https://www.disruptequity.com/

Connect with Carl Whitaker

Director of Research & Analysis, RealPage

[email protected]

http://www.realpage.com/

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By Anton Mattli

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