2023 Outlook For Multifamily

Written By: 
Louis A. Tucci
​Managing Director
L. Tucci Financial LLC

Despite forecast for a recession most professionals in the commercial real estate market are cautiously optimistic regarding multifamily and projections are far from dire.

The economic backdrop is the tailwind created by the increased cost of ownership for single family homes coupled with a nationwide shortage of housing.

Data indicates that rents began to soften in the last 90 days especially in certain markets. However, this trend is limited to a few geographical areas whereas investors continue to see moderate rent growth in some markets where office utilization rates and employment remain strong.

As the old saying goes when it comes to real estate; location…. location …. Location has never been truer.

This does not imply there aren’t challenges. There is little doubt that price discovery remains a challenge as a recalibration of property value is underway. The bid ask spreads are wide and cause for tensions between sellers and buyers.

Much of the growth in appreciation of apartments can be traced back over two decades as our economy came out of the financial crisis of 2007/2008. The Fed responded to the crisis by injecting liquidity and lower rates. Low borrowing cost stuck around for many years. Cheap money and easy access to capital drove investment.

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CIANJ member, Louis Tucci, currently serves as the Managing Director at L. Tucci Financial LLC. Using his business experience, Louis endeavors to help others achieve their financial independence. He can be reached at 201-291-2672 or [email protected]

Disclosure:
Louis A. Tucci is a Registered Representative of Coastal Equities, Inc. and an Investment Advisory Representative of Coastal Investment Advisors, Inc. Neither Coastal Equities, Inc. nor Coastal Investment Advisors, Inc. is affiliated with L. Tucci Financial, LLC. Investment Advisory Services are offered through Coastal Investment Advisors, Inc., and securities are offered through Coastal Equities, Inc., Member FINRA/SIPC, co-located at 1201 N. Orange St., Suite 729, Wilmington, DE 19801.
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Coastal and CoastalOne are trade names for the Coastal Companies.  The Coastal Companies are Coastal Equities, Inc. Coastal Investment Advisors, Inc. a US SEC Registered Investment Adviser and Coastal Insurance Services, which consist of several affiliated insurance agencies, co-located at 1201 N Orange St., Suite 729 Wilmington DE 19801