Cracks Forming in Apartment Prices

Declining asset prices for commercial real estate, noted in several new reports as well as the recently-published minutes from last month's meeting of the Federal Reserve Open Market Committee, have been a long-expected eventuality ever since interest rates began rising last year. While apartment asset prices are beginning to soften, strong fundamentals and positive rent growth trends could lead buyers and investors to see the light of opportunity shining through the cracks forming in multifamily property values.   Link to sources discussed in this episode:   Apartment List: “National Rent Report, February 2023” - https://www.apartmentlist.com/research/national-rent-data  Federal Reserve Bank of the United States: “Minutes of the Federal Open Market Committee January 31–February 1, 2023” - https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20230201.pdf  Moody’s Analytics: “The Fed’s 2% Rule: Is It Realistic? How Would a New Economic Regime Impact CRE?” - https://cre.moodysanalytics.com/insights/cre-news/the-2-percent-commitment/  MSCI: “Prices of US Commercial Property Tumbled in January” - https://www.msci.com/www/quick-take/prices-of-us-commercial/03673737959  Federal Reserve Bank of the United States: "2023 Stress Test Scenarios, February 2023" - https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20230209a1.pdf  RealPage: “Multifamily Permits and Starts Both Decline” - https://www.realpage.com/analytics/multifamily-permits-and-starts-both-decline/  United States Census Bureau: "Monthly New Residential Construction, January 2023" - https://www.census.gov/construction/nrc/pdf/newresconst.pdf  Berkadia: “Construction Timelines Research Report” - https://base.berkadia.com/wp-content/uploads/2023/02/Berkadia-Apartment-Construction-Timelines-Update-2023.pdf  For the latest multifamily news from across the internet, visit the Gray Report website: https://www.grayreport.com/  Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter/  DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.