226: Multifamily Sales Hit 4-Year Low: More Price Declines Incoming? w/Xander Snyder
Description
Multifamily sales are at the lowest point in the past four years. We haven’t seen transaction levels this low since the start of the pandemic and after the last housing crash. But, for buyers, this could point to some tremendous opportunities. With fewer sales could come higher cap rates, lower prices, and more profit per dollar spent on your next multifamily deal. The question is, how low will prices go, and when WILL be the right time to buy?
Xander Snyder, Senior Commercial Real Estate Economist at First American, joins the show to give us the latest update on multifamily sales, prices, cap rates, and even a prediction for 2025. Xander strongly argues that multifamily price declines could be far from over. With buyers patiently waiting for sellers to drop their prices and the cost of capital still so high, motivated sellers must act quickly to get a buyer, which could mean more price cuts.
We’ll also discuss why cap rates are expanding and how they’ve already jumped fifty percent in some markets. Plus, what could happen to rents as the “oversupply” of multifamily investments hits the market? An even better question is what happens when all that supply gets used up? We’re answering it all in this episode.
In This Episode We Cover
2024 multifamily transaction volume updates and why sales are so low
Cap rate expansion and why this is great news for buyers (but NOT for sellers)
Why multifamily price drops aren’t even close to finished
Rent price growth predictions and why multifamily investors shouldn’t be too sure that they can increase rents
How our multifamily “oversupply” could quickly become an undersupply
What to expect from the multifamily market in 2024 and into 2025 (significant changes!)
And So Much More!
Links from the Show
Join the Future of Real Estate Investing with Fundrise
Connect with Other Investors in the “On The Market” Forums
Subscribe to The “On The Market” YouTube Channel
See Dave at BPCON2024 in Cancun!
Multifamily Is Likely To Start Recovering in 2024—Here’s Why
Why Apartment Rents are Poised to Decline in Former Pandemic Hot Spots (Graph)
Jump to topic:
(00:00 ) Intro
(01:03 ) Multifamily Transactions at Rock-Bottom
(04:34 ) Why Volume is So Low
(06:29 ) Buyers Are Waiting for This
(08:38 ) Cap Rates Expand
(13:53 ) Investors Will Have to Wait
(14:57 ) Will Prices Keep Declining?
(17:38 ) Multifamily Rent Forecast
(19:36 ) The "Oversupply" Could Flip
(23:26 ) 2025 Predictions
Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-226
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