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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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.
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