5 Multifamily Real Estate Market Predictions from Industry Experts for 2021

The COVID-19 pandemic, social unrest, natural disasters and other crises have all led to economic strife in 2020. In the real estate industry, this could mean there are major opportunities for investments. In these uncertain times it’s best for new investors to turn towards experienced real estate investors for advice.

 

Here is what the experts are predicting:

 

  • Trey Stone suspects that the market won’t go as low as it did in 2008 and it won’t last as long. He says we have some economic pressure that will be relieved once there is a vaccine. Trey suspects that multifamily real estate values could increase to higher values than what they were before Covid-19 pretty quickly once we begin recovery. He believes it will be a tight window to invest in the properties that are being forced onto the market because of the economic downturn.  It will require quick action to invest before the values bounce back up.

 

  • John Fuqua of Fuqua Homes predicts that after the first of the year, we will see a lot of foreclosures. As some of the programs the government put in place to protect people who can’t pay their mortgages start to go away there will be people who are several months behind on their mortgage payments. This will affect the market as far as new homes, it will provide opportunities for rental properties, and you’ll see some of those people transition into the multifamily environment by going back to apartments as their residences. 

 

  • Carlos Vaz of Forbes Real Estate Council expects a surge of capital deployment for multifamily assets. He explains that this asset class has shown resilience and weathered the pandemic well. He believes that investors who planned to spend on other asset classes that are now hurting (like retail and office space) will now be attracted to multi-family investments.

 

  • CBRE’s economic advisers predict the multifamily market will reach its bottom in the last quarter of 2020 and begin recovery in the first quarter of 2021.They also predict that vacancies will bounce back with a full recovery within one year. Rents are expected to rebound fully by the beginning of 2022 as long as the pandemic is contained. Their forecast predicts a shorter downturn for multifamily properties than the downturn in the real estate market during the Great Recession.

 

  • Ellie Perlman of Forbes Real Estate Council believes Class B multifamily properties will remain solid due to consistently high occupancy rates during Covid-19. She predicts that Class C properties will drop in price due to the tenant demographic being affected by the novel Coronavirus.





What this Could Mean for Investors

 

Based on these predictions, investors need to act quickly for the best deals and opportunities. Multifamily real estate investments will regain value quicker than other asset types. These deals will also be sought after- maybe even in some asset classes more than others. Investors who have available capital will have the greatest opportunity.



“Cash is going to be king in the next four - six months because we’re going to see a lot of opportunities for investment in single family and multi-family” John Fuqua




Sources:

 

Real Estate Riches Podcast: 9.18.20

 

Forbes Real Estate Council Predictions

 

CBRE Economic Report





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