Fannie Mae is predicting a serious change in the multifamily real estate market. Ever since interest rates began to rise, multifamily has been on a downward spiral. Higher rates made profits fall, and as a result, buying and improving multifamily properties halted. And, with a massive lag in multifamily construction, new units were popping up left and right in already saturated markets, creating a race to the bottom for rent prices as multifamily operators struggled to keep their units occupied. But, the multifamily woes may be close to over.
Kim Betancourt, Vice President of Multifamily Economics and Strategic Research at Fannie Mae, joins us to share the findings of a recent multifamily report. Kim knows that there are oversupplied multifamily markets across the country. Cities like Austin have become the poster child for what oversupply can do to home and rent prices. However, Kim argues that this is only a fraction of the overall housing market, and most markets are in dire need of multifamily housing.
So, if much of America is still struggling with having enough housing supply, shouldn’t rents be on an upward trend? Kim shares her team’s findings and rent forecasts, explaining when rents could begin to climb, which multifamily properties will experience the most demand, and why we need MORE multifamily housing, not less.
Dave:
Hello everyone and welcome to the BiggerPockets Podcast. I’m your host Dave Meyer, and my friend Henry Washington is here with me today. Henry, good to see you.
Henry:
You as well my friend. Glad to be here.
Dave:
Do you invest in multifamily?
Henry:
I guess the technical answer to that is yes, I invest in small multifamily, so my largest multifamily unit, I have two or three different eight-unit buildings, but I don’t have a building above eight units.
Dave:
But that’s technically multifamily. And just for everyone listening, the traditional cutoff is at four units, and that might sound really arbitrary, but it’s actually not….