Multifamily Debt Hits $1T
[{"id": "cvb5ja0", "text": "Anyone care to say what this means to them? \n\nThere are a couple apartments available for sale in my area which is an anomaly. Also, inventory levels are slightly higher than what they should be across the board in another city I work in. \n\nGenerally, I have a bad feeling about the next couple years, but I hope I'm wrong.", "replies": [{"id": "cvb5vl9", "text": "Most people have a bad feeling about the next couple of years. Also it feels like the industry is trying to make a self fulfilling prophecy of a crash to occur in the the next couple of years ", "replies": [], "depth": 2}, {"id": "cvbgdb2", "text": "Increases in debt aren't necessarily ominous, i.e. a person buys a new home and their debt level skyrockets is more than reasonable.  If that same person just bought 4 with interest-only arms and no income or assets like 2004-06, then there is cause for alarm.  I'm not sure which markets you are referring to but you can look at some of the analysis I've published on the Phoenix Metro [here](http://abimultifamily.com/abinsight-phoenix-metro-apartment-market-hits-5th-inning-with-chance-of-extra-innings/) and [here](http://abimultifamily.com/abinsight-with-all-this-construction-were-still-under-supplied/).  Next week will be looking at more macro factors of the Phoenix Metro apartment market which includes a discussion on interest rates, baby boomer demographics &amp; wealth transfer etc.", "replies": [], "depth": 2}], "depth": 1}, {"id": "cvze9bu", "text": "I don't see the problem with this.  Right now money is still cheap and the multifamily loans are backed by income producing properties.  \n\nA major increase in vacancy could lead to foreclosures but most of the development I've seen has been in major city centers which are considered safe compared to other income producing assets.", "replies": [{"id": "cvzill5", "text": "Neither do I necessarily.  I tend to look towards debt length and terms.  Although I haven't yet piled through all recent loans (specifically in Arizona), I have noticed shorter terms (7 year is more the norm whereas last 2 years it was trending 10) and an uptick in seller carry in a 2nd position.", "replies": [], "depth": 2}], "depth": 1}]