A working paper from the Federal Reserve Bank of Cleveland outlines a new way of measuring rent growth with strong implications for how economic policy makers understand and track inflation, Fannie Mae's most recent commentary on the multifamily market reviews the housing implications associated with the growth of the 75+ population, Japan's bond market shifts signal greater concerns about inflation, and reports on the apartment market continue to highlight the strength of Midwestern markets with a lower cost of living.

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The Federal Reserve is raising rates another 50 basis points, the CPI report is showing inflation cooling, and multifamily investors and industry leaders are making predictions for the apartment market and commercial real estate in the year to come. Expectations of a serious economic downturn next year have lessened, and while financing will remain a challenge in 2023, strong apartment demand will continue to make multifamily assets a very attractive investment option.

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Investor capital flowing out of major real estate investment trusts like Blackstone's BREIT and Starwood's SREIT may cause some anxiety about the state of the multifamily market, but there is very little indication that these issues in the REIT space will have a meaningful impact on apartment asset prices. The issues affecting these REITs are the same ones driving the commercial real estate market as a whole: Interest rates have dampened investor demand and caused property values to moderate. Looking forward to 2023, multifamily fundamentals remain strong and Midwestern markets continue to attract positive attention from investors looking for stable, strong performance in the coming year.

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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.

Reports on the apartment market continue to show declining rent performance at the national level, but there is considerable variation among different markets, with midwestern markets receiving more attention for their strong, positive performance compared to many of the previously high performing markets in the South and West. In the broader economy, middling jobs numbers could mean that the Federal Reserve is less inclined toward another sharp increase in the Federal Funds Rate, but we have not yet felt the full effects of this year's rate hikes, which will continue to shape the multifamily market throughout 2023.  

Sources discussed in this episode:

ADP: “Employment Report” - https://adpemploymentreport.com/ 

GlobeSt: “Federal Reserve Watchers Wondering If It Will Finally Slow Rate Hikes” - https://www.globest.com/2022/11/29/federal-reserve-watchers-wondering-if-it-will-finally-slow-rate-hikes/ 

Colliers: “Capital Markets U.S. Snapshot, Q3 2022” - https://www.colliers.com/en/research/capital-markets-market-snapshot-q3-2022 

Apartment List: “National Rent Report” - https://www.apartmentlist.com/research/national-rent-data 

RealPage: “Loss to Lease Markets to Watch in 2023” - https://www.realpage.com/analytics/loss-to-lease-markets-to-watch-in-2023/ 

For the latest multifamily news from across the internet, check out the Gray Report website: https://www.grayreport.com/ 

Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter/ 

DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.

Interest rate pressures have settled the multifamily market considerably since the beginning of 2022, but the size and persistence of the housing shortage and unaffordability crisis all but ensures that home values will remain elevated in the future. While near-term economic uncertainty continues, the fundamentals of the multifamily market remain strong.

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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.

As investors slow down activity amid an uncertain economy and a multifamily market that continues to moderate, real opportunities for investment remain in a number of specific markets throughout the country. The rent growth story of 2022 has diverged significantly from 2021, and many of the markets with incredible growth last year have slowed down significantly in 2022, especially in the past few months. Increasingly, however, the markets that saw elevated—but not extreme—growth in 2021 are rising to the top this year, with Midwestern markets like Louisville, KY; Indianapolis, IN; Kansas City, MO, and Cincinnati, OH among the top markets for year-over-year rent growth.

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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.

As the results of the midterm elections point to a likely-divided Congress at the federal level, local ballot measures across the country bring changes to a number of markets, with some cities enacting rent control measures, dedicating money to building additional housing, or discouraging homeowners from leaving a property vacant for extended periods. While these policy changes are limited to specific markets, at the national level, the apartment market should not expect dramatic changes in the wake of the elections, as investors, buyers, and sellers continue to navigate the elevated interest rate environment and the potential for continued inflation in the immediate future.

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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. The opportunities referenced in this podcast do not represent an offer to invest.

The Federal Reserve has raised interest rates by another 75 basis points even as the economy and the housing market in particular have not fully absorbed the rate accumulating rate hikes from earlier this year in 2022. Reports published this week show lower sentiment in the multifamily market alongside slightly stronger seasonal rent trends, but other recent reports serve as a reminder of the resilience of the apartment market amidst an increasingly uncertain economy.

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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. The opportunities referenced in this podcast do not represent an offer to invest.

Recent Case-Schiller figures show single family home prices continuing to slide downwards, and discussions of a deflating housing bubble have steadily increased. At the same time, multifamily fundamentals are still strong, and while rising mortgage rates are a major factor in declining single family home prices, apartment demand should remain high given that mortgage rates are not a factor in renters' decisions.

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DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest.

While the Consumer Price Index recorded a substantial .8% monthly increase in rent prices, these historically-lagging figures are at odds with apartment industry reports showing moderating rent growth over the past few months. Even so, the positive long-term prospects for multifamily are reinforced by new research suggesting that the 15-year trend of declining U.S. birth rates may be reversing for certain populations.

For the latest multifamily news from across the internet, check out the Gray Report website: https://www.grayreport.com/

Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter/

DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. The opportunities referenced in this podcast do not represent an offer to invest.