Rising Interest Rates, Differing Views, Challenges in Demand/Supply…Oh My!

 

It’s no secret — there’s uncertainty in the current market. Interest rates are at an all-time high, completely affecting multifamily real estate. Multifamily properties have dropped in value, and people are concerned about how to proceed.

High interest rates have resulted in:

  • Increased capital costs
  • A lack of funding
  • Negative effects on short-term estimates

Differing views on the current climate highlight the overwhelming sense of chaos and unknowing. Some anticipated a pause, while others believed that strong economic indicators, such as the 10-year Treasury yields, could lead to a rate increase.

So much uncertainty feels like you’re being led through the dark. How can you feel safe? How can you trust anything about today’s market? How should you navigate the multifamily landscape moving forward?

Geopolitical factors are also impacting the multifamily sector. Overall economic insecurity is throwing the real estate market for a loop. Inflation affects the costs of properties and energy costs to maintain those properties. With recent policy and regulation changes, many factors in this sector are being reworked.

I’m sure, like many, you may feel overwhelmed and unsafe at such a time. But despite how it looks right now, multifamily is a sector you can place your trust in.

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