PassivePockets: The Passive Real Estate Investing Show Multifamily Market Secrets and Trends: Jay Parsons Explains
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Jan 28, 2025 Jay Parsons, a rental housing economist, dives into multifamily market trends and what's ahead for 2025. He explains why demand remains robust despite record new deliveries and discusses the complexities of interest rates and local policies. Jay predicts a split between struggling C-class properties and stable A/B-class options. He reveals that Midwest markets are thriving, while the Sunbelt may soon bounce back. For passive investors, understanding these dynamics is crucial for navigating the changing landscape.
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Strong Multifamily Demand
- Multifamily demand has been surprisingly strong, driven by several factors.
- Pent-up demand, a better-than-expected economy, and wage growth exceeding rent increases contribute to this phenomenon.
Stalled Construction
- New multifamily construction has stalled due to increased capital costs and lack of investor interest.
- Equity investors are seeking to buy below replacement cost, making new development less attractive.
Don't Wait to Invest
- Avoid waiting for all signals to turn green before investing in multifamily.
- A strong market with low supply may lead to lower cap rates and higher prices, benefiting early investors.