Gray Report host Spencer Gray speaks with Chris Salviati, Senior Housing Economist at Apartment List, about major trends in the multifamily space, notable apartment markets, and multifamily in relation to the larger economy.

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https://www.apartmentlist.com/research

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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. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

A "trifecta of positive inflation reports" shows consistently weakening inflation, and data from both the single-family and multifamily markets points to persistent strong housing demand. Multifamily investment activity, however, is low, and there is little sign of interest rate relief for multifamily borrowers still struggling with high debt costs and sluggish rent growth. The sharpening contrast between the potential for growth and the current stagnation in the multifamily market represents a significant opportunity for investors, especially those with greater access to capital.

Sources discussed in this episode:

Apartment List: Rent Report, June 2024: https://www.apartmentlist.com/research/national-rent-data

Colliers: “Capital Markets | 2024 Multifamily Outlook” - https://www.colliers.com/en/research/nrep-colliers-capital-markets-multifamily-market-outlook-2024

NAHB: “Considering Housing Inventory: Why Both New and Existing Supply Matters” - https://eyeonhousing.org/2024/06/considering-housing-inventory-why-both-new-and-existing-supply-matters/

Marcus & Millichap: “Get Ahead of The Fed – Why Inflation Isn’t As High As People Think” - https://www.marcusmillichap.com/research/videos/2024/07/get-ahead-of-the-fed-why-inflation-isnt-as-high-as-people-think

Learn more about Gray Capital's latest multifamily investment opportunity: SolanaIndy.com

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. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

Amid persistently high interest rates and waning, but still-elevated, inflation, prices for single-family homes continue to increase, and despite the lower rent growth in the apartment market, the Harvard JCHS's recent State of the Nation's Housing Report finds continued affordability pressure in both the rental and for-sale areas of the housing market. While both rent growth and the growth of single-family home prices have sharply increased in the past 3 years, prices for single-family homes have increased by a far greater amount, which is a strong signal of housing demand that points to higher rent growth in the multifamily market as the wave of new apartment deliveries subsides over the next year-and-a-half.

Sources discussed in this episode:

Harvard Joint Center for Housing Studies: “The State of the Nation’s Housing 2024” - https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_The_State_of_the_Nations_Housing_2024.pdf

John Burns Research and Consulting: “How will the declining birth rate impact the move-up housing segment?” - https://jbrec.com/insights/declining-birth-rates-fewer-children-affect-us-housing-demand/

Apartment List: “The U.S. Added Nearly 600,000 Super Commuters in 2022” - https://www.apartmentlist.com/research/the-us-added-nearly-600000-super-commuters

The Conference Board: "US Consumer Confidence Weakens Slightly in June" - https://www.conference-board.org/topics/consumer-confidence

Learn more about Gray Capital's latest multifamily investment opportunity: SolanaIndy.com

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. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

Lower housing starts could exacerbate housing affordability issues, and while much of the US multifamily market is cooling due to to increased supply, midwestern multifamily markets are showing solid performance above national averages.

Sources cited in this episode:

The United States Census Bureau: "New Residential Construction, May 2024" - https://www.census.gov/construction/nrc/current/index.html

The Wall Street Journal: “Rent Hikes Loom, Posing Threat to Inflation Fight” - https://www.wsj.com/real-estate/rent-hikes-loom-posing-threat-to-inflation-fight-e6797e39

RealPage: “Most U.S. Apartment Markets Recording Occupancy Improvement” - https://www.realpage.com/analytics/strong-occupancy-growth-in-april-may/

Bisnow: “'The Darling Of The Party': Investors Flock To Midwestern Multifamily As They Flee Struggling Asset Classes” - https://www.bisnow.com/chicago/news/multifamily/the-darling-of-the-party-investors-flocking-to-midwestern-multifamily-as-they-flee-struggling-asset-classes-124744

Yardi Matrix: National Multifamily Report, Summer 2024 - Multifamily’s Second-Half Balancing Act” - https://www.yardimatrix.com/publications/download/File/5778-MatrixMultifamilyNationalReport-Summer2024

Learn more about Gray Capital's latest multifamily investment opportunity: SolanaIndy.com

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. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

On the same day that the CPI showed yearly inflation ticking down to 3.3%, with zero price growth last month, the Federal Reserve released its updated economic projections along with commentary that raised the possibility of an interest rate cut this year, but there was little definitive indication on when that might take place. While CRE markets are showing more signs of adjustment to "higher for longer" rates, the improved inflation numbers and potential for lower rates are meaningful developments for the CRE lending market that is continuing to feel pressure from the persistent high-rate environment.

Consumer price index numbers show inflation down from 3.5% to 3.4% year-over-year in April, with monthly inflation numbers falling from 0.4% to 0.3%. It may be a bumpy road to the Federal Reserve's inflation target, but given the moderation in the job market along with these latest numbers from the CPI, speculation that the Fed will lower interest rates in September may have some validity, but in the meantime, elevated interest rates will put pressure on multifamily borrowers as the issue of loan maturities persists as a background factor that continues to shape the motivations of apartment buyers and sellers.

As a historic wave of newly-built apartments continues beyond the one-year mark, elevated absorption numbers and data showing the first positive growth in occupancy in 2+ years are noteworthy signs of resilience in the apartment market. In the broader economy, lower jobs numbers and declining consumer credit suggest a pullback in consumer spending and (hopefully) lower inflation, but while consumers may balk at ever-pricier Big Macs or Frappuccinos, apartment housing is still in high demand.

Sources discussed in this episode:

RealPage: “Apartment Occupancy Ticks Up for the First Time Since Early 2022” - https://www.realpage.com/analytics/april-2024-data-update/

Yardi Matrix: “National Multifamily Report, April 2024” - https://www.yardimatrix.com/publications/download/file/5497-MatrixMultifamilyNationalReport-April2024

Reuters: “Weaker US jobs data soothes Fed worries of renewed overheating” - https://www.reuters.com/markets/us/weaker-us-jobs-data-brings-some-relief-fed-2024-05-03/

The Motley Fool: “Consumer Credit Oozes Up 0.4%” - https://www.fool.com/investing/general/2013/06/07/consumer-credit.aspx

Federal Reserve Bank of San Francisco: “Pandemic Savings Are Gone: What’s Next for U.S. Consumers?” - https://www.frbsf.org/research-and-insights/blog/sf-fed-blog/2024/05/03/pandemic-savings-are-gone-whats-next-for-us-consumers/

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. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

With the Fed’s recent decision to keep rates at their current elevated levels, investors are facing a choice between increasingly positive multifamily fundamentals and an extended period of difficult financing.

CNBC: “Fed keeps rates steady as it notes ‘lack of further progress’ on inflation” - https://www.cnbc.com/2024/05/01/fed-rate-decision-may-2024-.html

Apartment List: “National Rent Report: ‘[G]rowth stalled out this month’” - https://www.apartmentlist.com/research/national-rent-data

CBRE: “The Past May Still Be Prologue in Multifamily Markets” - https://www.cbre.com/insights/briefs/motm-the-past-may-still-be-prologue-in-multifamily-markets

Pension Real Estate Association: “Compendium of Statistics” - https://www.prea.org/research/compendium/#:~:text=The%20Compendium%20of%20Statistics%20compiles,is%20available%20to%20members%20only.

RealPage: “Multifamily Starts Plunge in March, Indicating When Supply Wave Could Taper” - https://www.realpage.com/analytics/multifamily-starts-plunge-in-march-indicating-when-supply-wave-could-taper/

Cushman & Wakefield: Top Trends in the Multifamily Market: “Occupancies Are Holding Up Despite Record Deliveries” - https://www.cushmanwakefield.com/en/united-states/insights/top-trends-across-cw-multifamily-portfolio

Institutional Property Advisors: “Consumer Resilience Offers Benefits and Drawbacks for Commercial Real Estate” -

https://www.institutionalpropertyadvisors.com/research/special-report/2024/04/research-brief-april-gdp

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. Any offering would be made through a private placement memorandum and would be limited to accredited investors.