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The multifamily sector has experienced a surge in renter demand, an abundance of supply, and a slowdown in rent growth over the past year. According to Origin Investment’s “Top 10 2024 Predictions for Multifamily Real Estate” and Apartment List’s “7 Predictions for the 2024 Rental Market,” strong fundamentals are expected to continue driving this market forward.

Here are some specific forecasts:

– Long-term renters will see significant growth: With rising mortgage rates and home prices, more people will opt to become long-term renters. This is due to the current housing market being heavily skewed towards renting rather than buying.
– New deliveries in 2024 may come to a halt: While there are currently one million new multifamily units under construction with peak completions expected in 2024, Origin Investments predicts that development may slow down due to challenges such as limited real estate lending options.
– Rent growth is stabilizing: Despite negative rent growth caused by increased unit deliveries last year, it is predicted that positive single-digit rent growth will return by the end of 2024.
– Hybrid workers will impact multifamily demand: As many companies have implemented back-to-work mandates but still allow employees flexibility with working from home part-time, there has been an increase in demand for shared workspaces and extra bedrooms within rental properties.
– Distressed assets present investment opportunities: Falling property values combined with variable-rate bridge loans coming due could lead investors towards distressed assets. By Q3 of 2024, it is anticipated that quality value-add properties can be found at or below replacement cost pricing.

In conclusion,

the outlook for multifamily real estate remains optimistic based on these positive fundamentals projected through at least the next few years.