Where multifamily values and rental rates are headed
[{"id": "et70jyn", "text": "lots of good information and research here", "replies": [{"id": "et781mx", "text": "Before I even open it, come on, this boom will have it's doom", "replies": [{"id": "et7i01u", "text": "All cycles come to an end at some point, however multifamily still has room to run in general", "replies": [{"id": "et7nc67", "text": "Not much room.  How much time before the supply of vacant rental homes causes a rental dip?  Where it's the same price to rent a home vs. an apartment.  Some places may value apartment living, but where I'm from More Privacy = Higher Demand.  I am from a strange city though, so maybe it's me.  \n\nHi-Rise mania in the 2005-2008 period in Vegas taught me a serious lesson.  There were plenty of folks saying the same type of thing to me back then, and I thought I was crazy.  Hypersupply is the next or current phase and recession follows.  How many people's wages have increased in correlation with home prices/rents?  I'm probably the guy missing out, but I don't see many people talking about how many raises they got in the last 10 years.", "replies": [{"id": "et7owwp", "text": "If anything right now I would say there is a critical shortage of affordable housing, not an oversupply. Construction and input costs have risen substabtially so the luxury rental market is pretty well supplied because you have to build for high rents or it doesnt make sense.", "replies": [{"id": "et7rc4y", "text": "So wouldn't a \"critical shortage of affordable housing\" mean that they may need to lower rents to be affordable, or are you saying they build new homes and those are going to be more affordable?  What stops \"luxury rental\" from becoming affordable?  I think those are some of things that can create market volatility.  Idk.  Not claiming to be right, but wanting to understand your view.  Are you saying there's a huge gap between luxury rentals and affordable housing?  Is there that much demand to rent Luxury vs. buying luxury?  Doesn't sound logical, but that doesn't mean it's not true...", "replies": [{"id": "et7rzpo", "text": "Im saying the market overall is undersupplied based on demographics. Some areas I believe are over supplied with high end rentals with no where to go as far as rent growth and cap rate suppression, but that is not the entire housing market. Home ownership is a differnet animal because you have a lot more variables that go into a home purchase, ie family formation, loan credit standards, saving for downpayment, preference, etc.", "replies": [{"id": "et7ub86", "text": "I think they are very similar animals.  I think the variables may be different by definition, but are interchangeable with i.e. finding room mates you trust, rental application standards, saving for a deposit, community preferences, etc.\nSo when do you think the bull market converts to a bear market?!?!  What part of the world do you know best?  I'm pretty limited to the American SW.  I haven't studied other areas as much.  Natural disasters and/or war could alter the supply/demand ratio, but other than that I'm not seeing who is going to be paying these rental bumps.", "replies": [{"id": "et7v3ni", "text": "We finance multifamily across the country. I dont think this cycle will have as pronounced a bull/bear cycle as people are thinking, more of a soft landing. There seems to be more risk of deflation than a recession which may result in low growth for a protracted period. I tend to think we will model after Japan who is further down the road with aging population and first did QE in the early 2000s. They have had low growth and low rates for two decades, but I wouldnt say they have been in a recession the whole time. Dont see any systemtic risk like 2008/9.", "replies": [{"id": "et7w4s8", "text": "Right on, I could see that happening.  I probably have PTSD from 08.  I need to research Japan some more.\n\nMy brokerage now, has 4 partners, one being Japanese actually.  Our goal is to build our own multi-family portfolio.  Maybe we can finance through you someday soon.  Do you finance urban Multi-family development projects too?\n\nGlad we are able to debate about this in a professional manner.  I get pretty heated because it seems like most I see people that are getting by rather than flourishing.  And I come from a background of upper to high mid-class.", "replies": [{"id": "et80wwj", "text": "Would be happy to discuss anytime. Yes we finance multifamily developments. \n\nI think a lot of people today are burdened by one or several factors that otherwise would allow them to get ahead... the obvious ones being medical costs, student loans, housing, taxes, etc. If you look at the stock market you would think everyone must be rich, but the idea that the country as a whole came along for the ride is just not true, majority got left behind and are stuck.", "replies": [{"id": "et8u4jc", "text": "That's sweet I can tell you are a good guy regardless if we see small differences It's most likely because of different markets, ages, level of experience in the business and I think you probably have an up on me in all of those. I got licensed in 2004, UNLV alum '06.", "replies": [], "depth": 12}], "depth": 11}], "depth": 10}], "depth": 9}], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}, {"id": "et7vlgb", "text": "Vacant rental homes will certainly make an impact in suburban rental markets, but there are not many vacant rental homes in urban areas that are seeing growing demand. Most urban cities have a ton of rent growth potential, if you don\u2019t believe, look at Boston or SF, rent there are astronomical. Most cities aren\u2019t anywhere close but a precedent has been set that demand can remain despite absurd price levels.", "replies": [], "depth": 5}, {"id": "et7vyex", "text": "Vacant rental homes will certainly make an impact in suburban rental markets, but there are not many vacant rental homes in urban areas that are seeing growing demand. On your comment about stagnant wages,  urban cities have a ton of rent growth potential, if you don\u2019t believe it, look at Boston or SF, rents there are astronomical. Most cities aren\u2019t anywhere close but a precedent has been set that demand can remain despite absurd price levels. People are willing to spend 50+% of their income on rent, as seen in those cities.", "replies": [], "depth": 5}, {"id": "et8dbwa", "text": "I develop multifamily in Chicago and can't provide supply fast enough. I literally have tenants hounding me for units and just preleased an entire 5 unit building before drywall was done...", "replies": [{"id": "et8ujdz", "text": "Where are they all coming from?!  Nice to hear you're so busy!  Do you have any interest in the Vegas market?!?  Forming syndicates are what I'm working on.  Anybody can Dm me whenever they're interested, and I'll let you know how we can get in better contact.  It's nice to form new relationships in our business, even if only to share ideas.  Hope to get in touch!  You've got real solid info on Chicago and I had no idea because it's such a smaller City in Vegas.", "replies": [{"id": "etcmjee", "text": "Chicago is seeing a mass influx of highly educated millenials and gen Z. People ignore it as a market because it has negative population growth, but the vast majority of people leaving are on the low end of the income spectrum and almost all of those arriving are at the extreme upper end.\n\nFor example, I have a showing this afternoon with a real estate broker and her fiancee who are moving here from SF because he is attending Medical school in the city.", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "et8bgh3", "text": "Up up up", "replies": [], "depth": 1}]