226: Multifamily Sales Hit 4-Year Low: More Price Declines Incoming? w/Xander Snyder

On The Market

BiggerPockets

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4.8 • 820 Ratings

🗓️ 17 June 2024

⏱️ 29 minutes

🔗️ Recording | iTunes | RSS

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Summary

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 Find an Agent Find a Lender BiggerPockets Forums BiggerPockets Agent BiggerPockets Bootcamps Join BiggerPockets for FREE On The Market 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 Dave's BiggerPockets Profile Dave's Instagram Property Manager Finder See Dave at BPCON2024 in Cancun! Multifamily Is Likely To Start Recovering in 2024—Here’s Why Follow Xander on X 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 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Multi-family transaction volume is at its lowest point in four years.
0:05.7	But why is that?
0:07.4	Why is it hard to determine the value of multifamily properties today?
0:12.2	And why are so many investors sitting on the sidelines?
0:15.6	Today, we're talking about all things multifamily.
0:23.1	Welcome to On the Market.
0:24.8	I'm your host as usual, Dave Meyer, and today we're bringing on Zander Snyder.
0:30.5	He is the senior commercial real estate economist at First American.
0:35.3	And we're bringing Zander on to discuss the downward trend of multifamily transactions
0:40.5	and how that impacts cap rates and valuations.
0:44.8	And we'll also get into what you can expect to see for this asset class in the near
0:49.6	future.
0:50.4	Before we bring on Zander, just wanted to remind you all that if you want to stay up to date with every episode of the show,
0:57.3	make sure to search for On the Market in your favorite podcast app and hit that follow button.
1:02.3	Let's bring on Zander.
1:08.7	Zander, welcome to On the Market.
1:11.1	Thank you for joining us today.
1:12.9	Thanks so much for having me, Dave.
1:14.3	Looking forward to the conversation.
1:15.8	Me too.
1:16.6	Let's start with multifamily transactions.
1:20.6	My understanding is that we are sort of at one end of the extreme.
	...

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