Rental Demand Rebounds as Multifamily Hits “Peak Completions”

Downward pressure on rent prices is causing a “cascade” effect across all unit types. Whether you live in a luxury apartment or budget-friendly multifamily building on a busy street, you’ve probably seen asking rents lowering around you with apartment concession offers in many leasing offices. With multifamily supply hitting “peak completions,” apartment operators have had to tackle rising vacancy rates by lowering rents. But this trend could be reversing soon, just as things were getting more affordable for renters.
Jay Parsons, rental housing economist, spends much of his day searching through rental data to find trends pointing to what could happen next. We’ve brought him on to understand why rents are dropping, where they could be heading, and what happens now that multifamily construction is starting to pause.
Jay speaks on the rebounding rental demand that’s starting to show, why our “oversupply” of multifamily could quickly become a shortage, which apartment classes are seeing significant rent price discounts, and whether or not these problems could spill over into the single-family rental market. Plus, Jay gives his outlook for the next few years on whether or not rent growth will reaccelerate as multifamily construction starts fall significantly.
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Show notes at: link.chtbl.com/OTM
00:00 Intro
01:38 Rental Demand Rebounding?
05:03 We're at "Peak Completions"
07:40 What's Being Built?
12:02 Rent Cuts For All
17:57 Single-Family Rental Supply Shrinks
20:52 Wage Growth Outpaces Rents
22:40 Is It Better to Rent?
25:47 Supply and Rent Predictions
30:00 Big Regulatory Risks

[@TylerShort]

Arizona rental market is cratering. Oversupply, investor driven SFH demand from STRs to rentals. None of those numbers are working now and some investors are...if not panicking...uneasy. Many listings hitting the market at 2022/2023 asking prices as investors just want to wash their hands of an underperforming asset. Meanwhile median asking rents continues to plummet as rental supply has increased exponentially since 1/1/24. It's getting ugly folks! Buckle up

[@falsificationism]

Super interesting interview! Great guest on this one.

[@wallyjohnson4971]

Great interview

[@The1SimLash]

National Home Ownership rates have decreased slightly since 2021

[@danielkunimoto4436]

I feel like Jay is making arguments to debunk general feelings on the state on housing. The arguments come with data, certainly, but it's not clear if the argument on the other side was investigated with data. For instance, stating simply that wage growth is out-pacing rent growth now... from when to when? why do people feel that's not true? Is it because of the time period they are calculating from? Not enough scrutinizing the argument/data more precisely.