Multifamily Minute Reader Reflections: Buying, Selling, and Refinancing in 2023
We surveyed 40,000 multifamily investors to ask who's acquiring, divesting, and refinancing in the new year.
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For multifamily investors, it is critically important to know when the best time to buy, sell, or refinance a multifamily property is. We ran a survey in last week’s Multifamily Minute newsletter to ask what our readers are planning for 2023.
Investors said they’re far more likely to purchase a multifamily property in the next year than to sell or refinance one. Why? Let's dig in.
Survey Results
Our survey asked our readers to describe how likely they are to buy, sell, or refi an apartment building. The results are in the table below.
Purchase a multifamily property | Sell a multifamily property | Refinance a multifamily property | |
|---|---|---|---|
Extremely likely | 43% | 22% | 21% |
Likely | 21% | 14% | 36% |
Neither likely nor unlikely | 22% | 14% | 14% |
Unlikely | 7% | 14% | 7% |
Extremely unlikely | 7% | 36% | 22% |
Is It Really Time to Buy?
As you can see, 42.9% of respondents indicated they were extremely likely to purchase a multifamily property in the next year, with 21.4% stating they were likely going to buy. That’s nearly two-thirds of respondents, showing that — despite economic headwinds — most investors consider multifamily a safe play and don’t plan to stop new acquisitions. Of course, the poll didn’t ask our readers if they would buy more or fewer assets, but that’s something I can focus on in a future survey.
In terms of selling multifamily properties, the majority of our readers indicated that they are either unlikely or extremely unlikely to do so. The survey results showed that 35.8% of investors are extremely unlikely to sell a multifamily property in the next year, while 14.3% said they were unlikely to do so. This is understandable right now, particularly given the massive gap between sellers’ asking prices and what buyers are willing to pay.
Investors Move to Refinance
Looking at the sentiment on refinancing, some interesting results came to light. Nearly 60% of respondents indicated that they were either likely or extremely likely to refinance an apartment building in the coming year.
That may seem counterintuitive, given where interest rates stand, but it makes sense if you reframe the question: Are interest rates right now the highest they’ll be? Undoubtedly not, given what’s been coming out of the Fed these days. If you need to refinance, doing so early this year is going to be far less costly than waiting until later this year.
Of course, as much as I love to look at our survey data, there’s always the usual batch of caveats. Those who responded may not make up a representative sample, and it’s all forward-looking projections. It does, however, give us a nice window into how our Multifamily Minute readers are looking at the multifamily landscape and what they’re planning for this year.
Sign Up for the Multifamily Minute
If you’d like to participate in our next survey, I’d be delighted to get your perspective. Catch up on our latest insights, delivered straight to your inbox each and every Tuesday, by using the form below.
Our Previous Survey
In case you missed it, in mid-December we asked our readers about cap rates — particularly for apartment buildings — and where they anticipate them moving in 2023. You can read our analysis of the results here.