Multifamily Real Estate Market Analysis
with Carl Whitaker

On This Episode of Peak Market Watch...

Multifamily Real Estate Market Analysis with Carl Whitaker

Carl Whitaker join us to provide an incredible multifamily real estate market analysis! Carl Whitaker is the Director of Research & Analysis, RealPage – Nationwide market intelligence for multifamily owners and investors. 

Here are a few highlights on what he will cover in this episode of Peak Market Watch:

  • Nationally, multifamily unit absorption in 2021 was 60% greater than the previous annual peak dating back to the 1990s!
  • COVID-19 certainly caused the pent-up demand in 2021.
  • Trade-outs: New leases in January 2022 were up 18% from expiring lease & renewals were up 10-11%!
  • Record rent growth was a combination of a catch-up from no to little increases in 2020, jump in demand, as well as inflationary pressures
  • Rent growth is expected to continue in 2022 but not at 2021 levels
  • Multifamily permitting did not reach pre-Great Recession levels until 2014
  • Affordability A Class properties: Rent to income ratio is typically in the upper teens %
  • Affordability B Class properties: Rent to income ratio is typically in the lower 20s %
  • Affordability C Class properties: Rent to income ratio is still just at around 27-28%
  • In summary, at a broad level, affordability is still not a significant issue at investment grade/professionally managed properties despite significant rent increases
  • Delinquencies: Even during the depths of the 2020 downturn, collections were down by just 3% compared to pre-pandemic levels whereas Class C assets showed more challenges, particularly in markets that implemented renter protections. 
  • No expectation of an eviction “tsunami”
  • Expense pressure has been very strong, particularly due to increases in payroll, insurance premiums, and property taxes
  • Tight and innovative asset and property management will be crucial to keep expenses at bay – technology solutions are key to cut costs without cutting service quality
  • Loss-to-lease: Still a good amount of runway to increase rents, particularly in certain sunbelt markets with record low vacancies such as Florida
  • Sunbelt markets: There is an increased interest to rent in urban areas but that does not come at the expense of suburban markets – the demand is still so strong that both suburbs and urban centers in the sunbelt markets are benefitting for such demand
  • Large Markets you should be watching: Raleigh Durham, NC – Mid-size market: Cape Coral, FL – Small market: Ashville, NC

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