Transforming U.S. Real Estate: Navigating Emerging Trends in Multifamily Investments | Real Estate Market Update w/ Martin

What if the US multifamily real estate market is on the brink of a transformation that could redefine your investment strategy? Join Martin Perdomo on Wealthy AF as we dissect the emerging trends that are shaping the future of real estate. We'll explore how homebuyers are navigating through high mortgage rates and political uncertainty, leading to a surprising uptick in pending home sales. Despite sellers' cautious approach with new listings barely moving, active inventory is expanding, offering buyers a broader range of choices. Discover why metro areas such as San Jose and Dallas are witnessing a surge in sales, while others like Tampa are experiencing declines, and what this means for your next real estate move.

As the apartment sector stabilizes with vacancy rates leveling off for the first time in years, rents are poised for growth. With over 1.2 million new units rapidly filling up, demand for apartments has surged to its peak since 2021, presenting a golden opportunity for investors amidst a slowdown in construction. We'll delve into the implications of these shifts and how they can impact your investment strategy. Whether you're looking to buy, sell, or invest, Martin's insights will equip you with the knowledge to thrive in this evolving market. Don't miss the chance to stay ahead of the curve with the latest data and perspectives that could significantly influence your real estate decisions.

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Transcript

Speaker 1: 0:28

What if I told you the US multifamily market is on the verge of a major shift? Then it could mean bigger opportunities for investors. Stick around, because today we're talking about the latest data that shows apartment demand is climbing, vacancy rates are stabilizing and rents could be on the rise. Welcome back to Wealthy AF, where we break down the latest in personal development, entrepreneurship and investing. I'm your host, martin Perdomo, and in today's episode we're diving into the current state of the US multifamily market, one of the most talked about sectors in real estate.

Speaker 1: 1:05

Pending home sales actually rose 4.3% year over year in the four weeks ending November 3rd 2024. Yeah, that's right. Despite mortgage rates sitting at a painful 7% and the uncertainty of election in 2024, homebuyers are still making molds. Let's break that down. We all know when mortgage rates shoot up, people tend to hit boss. After all, the average monthly mortgage payment is sitting at around $2,600. But here's the thing Buyers have adjusted. And what's even more interesting is that, while pending sales are holding strong, new listings only inched up by 0.3% year over year. That's not good for the market, as we have an inventory issue. That means sellers are being cautious. They're sitting on their sidelines, probably waiting for the election results before making any moves. But inventory overall is up. Active listings rose 12.3%. So if you're a buyer, you've got more options than this time last year. Even though sellers are holding back a little, it's a balancing act for both sides. Now here's where things get even more interesting. Pending sales have spiked in places like San Jose up by a whopping 24.7%, in Dallas 17.8% and in Portland 17.6%. Meanwhile, other markets like Tampa and Fort Lauderdale they saw drops, with Tampa down 25.8%. So what does this mean for you, whether you're buying or selling? Well, you're a buyer. Now could be your time to act.

Speaker 1: 3:02

Mortgage rates aren't going down anytime soon and they could rise further after the election. If you're in the market, this might be your window before rates push affordability even further out of reach. Have some thoughts on this. Yes, rates are really high right now, as the 10-year treasury hit a super high of 4.4% as of the day I record this here, november 7th. I believe it is November 7th 2024. I record this it was 4.4% two days after the election and the rates are high. They really are right. There's some thoughts and concerns economists why they think that the 10-year treasury is so high, and I personally believe that the rates will come down once the president-elect gets back into the office, and we're going to see rates come down and we're going to see. I believe, that real estate is going to come back and be hot again. Just my thought.

Speaker 1: 4:07

On the flip side, if you're a seller, waiting might not be in your best interest. The buyers are out there and while there's uncertainty about rates, it's clear people are still buying homes, especially in those hot metro areas we just mentioned. Before we dive deeper, let me ask you are you feeling stuck in today's market, not sure how to navigate these high interest rate and economic uncertainty? If you want to master real estate, even in these challenging times, my personal real estate coaching program is designed for you. Whether you're buying, selling or investing, I'll show you how to thrive in any market, just like today's. Head on over to WealthBAFai and let's get you started. Don't wait for the market to change. Learn how to win right now. Now back to the show.

Speaker 1: 5:01

For the first time in three years, us apartment vacancy rates are stabilizing, and that means something important for investors. Rents are likely to increase soon. According to CoStar, demand for apartments is at its highest since 2021. Filling over 1.2 million new units. National vacancy rates are now around 6.6%, a slight dip from recent peaks, signaling a market correction that could benefit investors. Here's why this matters.

Speaker 1: 5:36

The pace of apartment construction is set to slow in the coming years. By the end of 2024, we're expecting just 672,000 new units to be completed, and that number drops drastically to 336,000 in 2025, with fewer new units on the horizon. The market is likely to tighten, which gives landlords more leverage for rent increases. Gives landlords more leverage for rent increases. Let's talk numbers, guys. Cities like New York, los Angeles, indianapolis are already seeing rent increases of over 5%. Meanwhile, austin, texas, where vacancy rates are above 15%, yikes due to rapid construction faces rent stagnation and landlords are having to offer concessions to keep tenants.

Speaker 1: 6:27

And as Jay Parsons, a rental housing economist, puts it, supply pressures have been the primary challenge for apartment investors, but they are both predictable and temporary. End of quote. As we look ahead, the slowdown in the new apartment construction, combined with the rising demand, could create a perfect storm for multifamily investors. With tighter rental conditions and a steady of rising rent prices, there's a significant opportunity to capitalize on this market rebound. If you're ready to turn your goals into gold, you're in the right place, because being broke was never the plan. Let's be wealthy AF and that's a wrap. See you guys next week.