The Gray Report Podcast Spencer Gray

The Biden administration has announced a proposal for a 5% rent cap, despite the fact that rent growth has been markedly below average for the past year-and-a-half, with this rent growth correction finally showing up in the Consumer Price Index and contributing to the milestone monthly deflation recently recorded for June. With lower inflation numbers and some suggestions of impending rate cuts from the Federal Reserve, the multifamily lending market should become more favorable; however, despite optimistic projections for the future of the apartment market, initial rate cuts from the Fed may not alleviate some multifamily borrowers' current distress, which has grown significantly in recent months.



Sources discussed in this episode:



The White House: “President Biden Announces Major New Actions to Lower Housing Costs by Limiting Rent Increases and Building More Homes” - https://www.whitehouse.gov/briefing-room/statements-releases/2024/07/16/fact-sheet-president-biden-announces-major-new-actions-to-lower-housing-costs-by-limiting-rent-increases-and-building-more-homes/



Bisnow: “Multifamily Distress Leaps 185% As Delinquencies Pile Up” - https://www.bisnow.com/national/news/capital-markets/multifamily-distress-leaps-185-as-delinquencies-tick-up-125089



Moody’s Analytics: “It Is Not All About Insurance: Navigating Through Major Expenses for Multifamily Properties” - https://cre.moodysanalytics.com/insights/cre-trends/major-expenses-for-multifamily-properties/



RealPage: “RealPage Forecast Points to Improved Rent Growth in 2025” - https://www.realpage.com/analytics/apartment-forecast-2nd-quarter-2024/



Marcus & Millichap: “Has the Fed Finally Reached a Tipping Point?” - https://www.marcusmillichap.com/research/videos/has-the-fed-finally-reached-a-tipping-point



The Bureau of Labor Statistics: “Consumer Price Index - June 2024” - https://www.bls.gov/news.release/cpi.nr0.htm



For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠



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DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

Apartment prices increased a full 4.9% last month, according to recent data from Green Street's Property Price Index, which follows a 2% increase from the previous month and is the strongest positive trend since late 2021. Apartment demand remains strong amid a generational peak in new apartment supply. Weakening (however gradually) inflation, alongside indications from the Federal Reserve that interest rate cuts are a growing possibility, could finally lead to a more active multifamily investment market, but currently, sales activity is relatively low.



Sources cited in this episode:



Green Street: “Commercial Property Prices Trending Upward” - https://insights.greenstreet.com/hubfs/GSCPPI-20240705.pdf



RealPage: “U.S. Apartment Demand Surges in Second Quarter” - https://www.realpage.com/analytics/2nd-quarter-2024-data-update/



Yardi Matrix: “National Multifamily Report, June 2024” - https://www.yardimatrix.com/publications/download/file/5800-MatrixMultifamilyNationalReport-June2024



GlobeSt: “Rent Control’s Impact on Multifamily” - https://www.globest.com/2024/07/08/rent-controls-impact-on-multifamily/



Harvard Joint Center for Housing Studies: “Middle-Income Housing Programs Emerge as Affordability Challenges Climb the Income Ladder” - https://www.jchs.harvard.edu/blog/middle-income-housing-programs-emerge-affordability-challenges-climb-income-ladder



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



Learn more about Gray Capital's latest multifamily investment opportunity: SolanaIndy.com



DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

Gray Report host Spencer Gray speaks with Chris Salviati, Senior Housing Economist at Apartment List, about major trends in the multifamily space, notable apartment markets, and multifamily in relation to the larger economy.



Follow the latest reports from the Apartment List research team:

https://www.apartmentlist.com/research



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



Learn more about Gray Capital's latest multifamily investment opportunity: SolanaIndy.com



DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

A "trifecta of positive inflation reports" shows consistently weakening inflation, and data from both the single-family and multifamily markets points to persistent strong housing demand. Multifamily investment activity, however, is low, and there is little sign of interest rate relief for multifamily borrowers still struggling with high debt costs and sluggish rent growth. The sharpening contrast between the potential for growth and the current stagnation in the multifamily market represents a significant opportunity for investors, especially those with greater access to capital.



Sources discussed in this episode:



Apartment List: Rent Report, June 2024: https://www.apartmentlist.com/research/national-rent-data



Colliers: “Capital Markets | 2024 Multifamily Outlook” - https://www.colliers.com/en/research/nrep-colliers-capital-markets-multifamily-market-outlook-2024



NAHB: “Considering Housing Inventory: Why Both New and Existing Supply Matters” - https://eyeonhousing.org/2024/06/considering-housing-inventory-why-both-new-and-existing-supply-matters/



Marcus & Millichap: “Get Ahead of The Fed – Why Inflation Isn’t As High As People Think” - https://www.marcusmillichap.com/research/videos/2024/07/get-ahead-of-the-fed-why-inflation-isnt-as-high-as-people-think



Learn more about Gray Capital's latest multifamily investment opportunity: SolanaIndy.com



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. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

Amid persistently high interest rates and waning, but still-elevated, inflation, prices for single-family homes continue to increase, and despite the lower rent growth in the apartment market, the Harvard JCHS's recent State of the Nation's Housing Report finds continued affordability pressure in both the rental and for-sale areas of the housing market. While both rent growth and the growth of single-family home prices have sharply increased in the past 3 years, prices for single-family homes have increased by a far greater amount, which is a strong signal of housing demand that points to higher rent growth in the multifamily market as the wave of new apartment deliveries subsides over the next year-and-a-half.



Sources discussed in this episode:



Harvard Joint Center for Housing Studies: “The State of the Nation’s Housing 2024” - https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_The_State_of_the_Nations_Housing_2024.pdf



John Burns Research and Consulting: “How will the declining birth rate impact the move-up housing segment?” - https://jbrec.com/insights/declining-birth-rates-fewer-children-affect-us-housing-demand/



Apartment List: “The U.S. Added Nearly 600,000 Super Commuters in 2022” - https://www.apartmentlist.com/research/the-us-added-nearly-600000-super-commuters



The Conference Board: "US Consumer Confidence Weakens Slightly in June" - https://www.conference-board.org/topics/consumer-confidence



Learn more about Gray Capital's latest multifamily investment opportunity: SolanaIndy.com



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 video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

Lower housing starts could exacerbate housing affordability issues, and while much of the US multifamily market is cooling due to to increased supply, midwestern multifamily markets are showing solid performance above national averages.



Sources cited in this episode:



The United States Census Bureau: "New Residential Construction, May 2024" - https://www.census.gov/construction/nrc/current/index.html



The Wall Street Journal: “Rent Hikes Loom, Posing Threat to Inflation Fight” - https://www.wsj.com/real-estate/rent-hikes-loom-posing-threat-to-inflation-fight-e6797e39



RealPage: “Most U.S. Apartment Markets Recording Occupancy Improvement” - https://www.realpage.com/analytics/strong-occupancy-growth-in-april-may/



Bisnow: “'The Darling Of The Party': Investors Flock To Midwestern Multifamily As They Flee Struggling Asset Classes” - https://www.bisnow.com/chicago/news/multifamily/the-darling-of-the-party-investors-flocking-to-midwestern-multifamily-as-they-flee-struggling-asset-classes-124744



Yardi Matrix: National Multifamily Report, Summer 2024 - Multifamily’s Second-Half Balancing Act” - https://www.yardimatrix.com/publications/download/File/5778-MatrixMultifamilyNationalReport-Summer2024



Learn more about Gray Capital's latest multifamily investment opportunity: SolanaIndy.com



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. Any offering would be made through a private placement memorandum and would be limited to accredited investors.