As multifamily industry leaders gather for the NMHC Conference in Las Vegas, the market remains in a tenuous state, with confidence in apartment fundamentals alongside uncertainty about the economy. Additionally, the Federal Reserve's recent 0.25% rate hike could point to a forthcoming taper and decrease in interest rates as the year progresses, but the Fed's actions will likely do little in the near term to resolve the financing and pricing challenges in the multifamily market.

Sources discussed in this episode:

Marcus & Millichap: “Housing Research Brief” - https://www.marcusmillichap.com/research/research-brief/2023/01/research-brief-january-housing

Marcus & Millichap: “2023 U.S. Multifamily Investment Forecast” - https://drive.google.com/file/d/1ANgdyinHxEo7LwSxhWLpuNXPHx9GN_AI/view?usp=share_link

The White House: “Fact Sheet: Biden-Harris Administration Announces New Actions to Protect Renters and Promote Rental Affordability” - https://www.whitehouse.gov/briefing-room/statements-releases/2023/01/25/fact-sheet-biden-harris-administration-announces-new-actions-to-protect-renters-and-promote-rental-affordability/

The White House: "Blueprint for a Renters Bill of Rights" - https://www.whitehouse.gov/wp-content/uploads/2023/01/White-House-Blueprint-for-a-Renters-Bill-of-Rights.pdf

Jacobin: "Joe Biden’s New Relief Plan for Renters Is Incredibly Weak" - https://jacobin.com/2023/01/joe-biden-renter-relief-plan-weakness-tenant-organizing-landlord-profits

Apartment List: “National Rent Report, January 2023” - https://www.apartmentlist.com/research/national-rent-data

For the latest multifamily news from across the internet, visit 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.

Director of Research & Analysis, Carl Whitaker, joins Gray Capital President and CEO Spencer Gray to discuss major trends, markets, and metrics to follow in 2023.

Sources discussed in this episode:  

RealPage: "Three Types of Apartment Markets That Could Outperform in 2023" - https://www.realpage.com/analytics/three-types-of-markets-that-could-outperform-in-2023/ 

RealPage: "Three Types of Markets That Could Struggle in 2023" - https://www.realpage.com/analytics/three-types-of-markets-that-could-struggle-in-2023/

For the latest multifamily news from across the internet, visit 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 video is not an offer to invest.

Forecasts continue to provide a clearer view of the major factors expected to drive multifamily fundamentals in 2023, and the investment market is waiting for the kinds of sales activity that will clarify a pricing environment that is still adjusting to the escalating interest rate hikes from the Federal Reserve. Additionally, the as-yet-unknown timing and severity of a potential recession, even a mild one, could mean the difference between robust rent growth or flagging performance in 2023.

For the latest multifamily news from across the internet, visit 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.

Projections for multifamily performance in 2023 hew far closer to historical averages than in past years, and the potential for recession has played a major role in experts' predictions for the multifamily market. With incoming apartment supply expected to make a big impact on markets throughout the country, insights into the drivers of housing demand, like those found in a new report on household formation from the Harvard Joint Center for Housing Studies, are critical for navigating the multifamily investment market this year.

For the latest multifamily news from across the internet, visit 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.

The apartment market has shifted in a number of ways, not the least of which is moderating national rent growth, but the U.S. national average obscures a marked reshuffling among individual multifamily markets in the country. Less volatile markets that saw slower growth in 2021 and early 2022 have risen to the top of rent growth rankings, while the hyper-growth remote working destinations of yesteryear are seeing more anemic performance that could persist given the amount of new apartment supply scheduled to be completed in those markets.  

For the latest multifamily news from across the internet, visit 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.

Among the many recent outlooks and projections for the multifamily market this year, some predictions will naturally be more accurate than others. The Gray Capital team discusses the state of the multifamily market and different visions for the markets and trends that will be the most prominent in 2023.

For the latest multifamily news from across the internet, visit 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.

Some impactful trends of 2022 may not be as prominent next year. For example, this year's dramatic interest rate increases are expected to plateau and 2022's high levels of inflation will likely to decrease in 2023. That being said, many of the major forces driving the multifamily market will continue. The critically low supply of housing may not have gotten as much attention in light of the declining rent and single family home prices this year, but housing demand will remain high until single family and apartment construction dramatically increases, which will not happen overnight or next year, for that matter.  

Sources discussed in this episode:  

Apartment List: “2022 Rental Market Recap Report – 9 Key Trends” - https://www.apartmentlist.com/research/2022-rental-market-recap-report-9-key-trends

St. Louis FRED: “Household Estimates” (Click “Edit Graph” and change Units to “Percent Change from Year Ago” to get a view of changing household formation) - https://fred.stlouisfed.org/series/TTLHHM156N#0 

Federal Reserve Bank of the United States: “Summary of Economic Projections, December 14, 2022” (page 4 contains dot plot of interest rate projections) - https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20221214.pdf 

Wisconsin Institute for Law and Liberty: “How Laws and Regulation Add to Housing Prices in Wisconsin” - https://will-law.org/wp-content/uploads/2022/12/Housing-FINAL-2.pdf 

Berkadia: “Rent Control 2022 Elections Update” - https://base.berkadia.com/wp-content/uploads/2022/12/Berkadia-Rent-Control-2022-Elections-Update.pdf

The Atlantic: “The Obvious Answer to Homelessness” - https://www.theatlantic.com/magazine/archive/2023/01/homelessness-affordable-housing-crisis-democrats-causes/672224/ 

The Manhattan Institute: “How to Fight Housing Price Inflation Policy Menus for Stopping Government-Induced Housing Woes from Spreading Beyond the Coasts” - https://www.manhattan-institute.org/how-to-fight-housing-price-inflation 

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

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

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

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.

For the latest multifamily news from across the internet, visit 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.

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.

For the latest multifamily news from across the internet, visit 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.

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.

For the latest multifamily news from across the internet, visit 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.