by Scott Sowers

Flipping any kind of real estate is a lot easier when the cost of capital is low, a condition that began deteriorating in early 2022 when the Federal Reserve began a long upward hike of the federal funds rate. Data from the National Multifamily Housing Council published in July shows continuing tight market conditions, with a slight uptick in sales volume. Equity financing is down while debt financing is up.

Geography is also playing a role. “Rent growth remains low in the South and West amidst a historic overhang of new supply, even though strong demand has kept absorptions high and occupancy stable,” said NMHC’s Chief Economist and Senior Director of Research, Chris Bruen.

“Tighter apartment conditions persist in the more supply-constrained Northeast and Midwest,” he added. “While high levels of political and economic uncertainty have kept some equity capital on the sidelines, survey respondents did report an uptick in transaction volume for the second consecutive quarter.”  

Read Scott Sowers’ article in Units Magazine.