Tight capital markets coupled with a building slowdown don’t bode well for the undersupplied multifamily market.Last week, Richardson-based real estate software company RealPage, Inc. issued a news release titled “Statement from RealPage: The Real Story.”said an algorithm from the company aided landlords in raising rents and created an environment to collude with one another to do so. Other publications picked up the narrative.
Its listed reasons are as follows: “persistent undersupply of rental housing units; increasing demand for rental housing in many areas of the country; inflationary pressures that affect costs to build, insure and manage housing properties; inefficient or unnecessarily onerous permit and zoning requirements; higher mortgage rates and home prices driving more people to rent rather than own their own homes; and changes in where and how people choose to live.
Capital markets remain constrained, battered by high interest rates and banks not only leery of new commercial real estate loans, but bracing for ones that could go belly up.Caitlin Sugrue Walter of the National Multifamily Housing Council said at the National Association of Real Estate Editors Annual Real Estate Journalism Conference on June 20 that during and after the COVID-19 pandemic most development and construction delays dealt with part-related shortages.
“You don’t want the government to step in and say, you know, ‘This is the price you need to be at,’” said Meyer. “But I do think as developers when we look at product and we work with our builders ... we have to work harder with those builders to figure out how we create product on smaller lots that is actually more efficient and try to lower that price. It’s the hardest part of our game right now.”In the short term, that will help the excess apartments being built get absorbed, and that’s a good thing.
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