Multifamily Minute Reader Reflections: We're Buying This Many Units in 2024
Following a fairly optimistic outlook, our 45,000 subscribers tell us how many units they plan to pick up this year.
Start Your Application and Unlock the Power of Choice$5.6M offered by a Bank$1.2M offered by a Bank$2M offered by an Agency$1.4M offered by a Credit UnionClick Here to Get Quotes!A lot of experts have been talking about how multifamily will start getting back to normal in 2024. And while Fed Chair Jerome Powell has said rate cuts will likely come slower than many may expect, cuts do indeed appear to be on the horizon — provided inflation keeps cooling.
There's still a massive amount of new supply coming in most markets, of course, and while that may give many investors pause, it's only temporary: We're nowhere near solving the housing crisis, after all. Those units? They'll get absorbed, even if vacancy spikes in the near term.
So last week, we asked our Multifamily Minute subscribers about their apartment building investment plans for the year.
Survey Results
And the results are in:
Units planned to acquire in 2024 | Percent of respondents |
|---|---|
50 or more units | 4% |
30 to 49 units | 11% |
15 to 29 units | 14% |
5 to 14 units | 35% |
Fewer than 5 units | 29% |
None | 7% |
It does seem we're pretty optimistic, doesn't it?
I ran a survey about this very same topic almost a year ago. Now, while I'm sure many people who answered last year's didn't answer this one (and vice versa), it's hard to ignore the huge uptick in folks targeting larger properties in 2024.
In any case, it's great to see some statistics back up the restrained optimism I myself am feeling. It'll be interesting to see how this actually bears out, come the publication of market reports and other sources in the coming quarters.
The interesting thing is that right now, there are some potentially great investment opportunities out there.
Yes, rates are a bit higher than any of us would like right now. But keep in mind the old (slightly adapted) adage: Date the rate, marry the apartment building.
You can always refinance once rates fall, after all. But once rates start to decrease more, that's like going to put some intense upward pressure on property values and sales prices.
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Our Previous Survey
Last week, I talked about cap rates — and our expectations for where they're headed later this year. Most of us expect a slight uptick in yields, but you've got to be careful not to rely overly much on this single (imperfect) calculation.