PassivePockets: The Passive Real Estate Investing Show

Multifamily Market Secrets and Trends: Jay Parsons Explains

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.

38:15

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Episode guests

Jay Parsons

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Episode notes

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Quick takeaways

Despite record high supply, strong multifamily demand persists, driven by demographic shifts favoring young renters and improving economic conditions.

Investors should focus on low-supply markets in the Midwest and Sunbelt regions, where steady demand and stable rental growth are promising.

Deep dives

Robust Demand for Multifamily Housing

The multifamily housing market is experiencing unexpectedly strong demand despite record-high supply levels. This surge in demand can be attributed to several factors, including a significant demographic shift with many young renters—typically in their 20s and 30s—continuing to choose apartments over homeownership. Additionally, the recovering economy, combined with inflation cooling off and wages rising faster than rents, has supported this trend. As a result, many markets are effectively absorbing the newly delivered units, countering initial fears that supply would overwhelm demand.

Intro

2min

Navigating the Multifamily Market

8min

Navigating Real Estate Development Challenges

4min

Navigating the Multifamily Real Estate Landscape

12min

Evolving Expectations for LPs

5min

Navigating Real Estate Financing Trends

6min

Shifting Real Estate Investment Horizons

3min

We welcome rental housing economist Jay Parsons to dissect the current multifamily landscape and offer insights on what 2025 might bring. Jay unpacks why record new deliveries haven’t led to severe distress (yet), how interest rate surprises are reshaping capital markets, and whether policy risks could outweigh simple supply-and-demand fundamentals. Learn why he believes “steady eddy” Midwest markets are surging, why the Sunbelt could soon make a comeback, and what these trends mean for passive investors looking at longer-term holds.

Today’s Episode Takeaways:

- Why multifamily demand has remained surprisingly strong

- Whether we’ll see more distressed properties change hands in 2025

- How changes in supply, policy, and interest rates are shaping next year’s outlook

- Why Jay sees a potential split between “busted” C-class deals and A/B-class stability

- Key factors for LPs to consider when underwriting longer-term investments

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Disclaimer: The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk, so use your best judgement and consult with qualified advisors before investing. You should only risk capital you can afford to lose. Remember that past performance is not indicative of future results. This podcast may contain paid advertisements or other promotional materials for real estate investment advisers, investment funds, and investment opportunities, which should not be interpreted as a recommendation, endorsement or testimonial by PassivePockets, LLC or any of its affiliates. Viewers must conduct their own due diligence and consider their own financial situations before engaging with any of the advertised offerings, products or services. PassivePockets, LLC disclaims all liability for direct, indirect, consequential or other damages arising out of reliance on information and advertisements presented in this podcast.

jimpfeifer@biggerpockets.com

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