Show Notes

What’s ahead for multifamily investing in 2026? In this solo episode, Michael Blank breaks down what actually happened in 2025, what’s driving this year’s market, and why now is the time to get off the sidelines. We’re coming out of a tough cycle—flat rents, high vacancies, and brutal interest rates—but things are stabilizing. That stability, combined with shrinking supply and steady demand, is setting the stage for a strong comeback. Whether you’re a new investor or you’ve taken a beating the last few years, this episode will help you make smart, confident moves in today’s market.

Key Takeaways

What Really Happened in 2025

  • Rent growth was weaker than expected—flat to slightly down, depending on the market.

  • Absorption was strong (highest in 25 years), but new supply outpaced demand.

  • A huge wave of Class A deliveries pushed vacancy rates up and rents down across asset classes.

  • Class B and C properties took an unexpected hit as new Class A units competed on price.

Why 2026 Looks Different (and Better)

  • New construction is falling off a cliff due to high interest rates and construction costs.

  • Fewer permits = less future supply, which creates upward pressure on rents.

  • Concessions are finally burning off—an early sign rents are about to rise again.

  • Demand for affordable housing remains high, especially with homeownership out of reach for many.

Interest Rates and the Fed: What to Expect

  • The Fed’s outlook is “flat to down,” signaling more stable lending conditions.

  • This is a huge shift from the aggressive hikes of the last few years.

  • Predictable rates mean we can finally underwrite deals with more confidence.

Short-Term Risks to Watch

  • Youth unemployment (10%+) could delay household formation and rental demand.

  • Policy moves (like tariffs or stimulus) may shift construction or financing dynamics.

  • Geopolitical and economic uncertainty could impact absorption timing and investor sentiment.

Why 2026 Could Be the Best Entry Point in Years

  • Pricing is 30–35% off peak in many markets—without the frothy underwriting of 2021–2022.

  • Fewer buyers = less competition = better deals.

  • This feels a lot like 2009–2010, when the smart investors loaded up while others sat on the sidelines.

  • It’s not about quick wins—it’s about setting up your portfolio for 2027–2028 and beyond.

Advice for Active and Passive Investors

  • If you're burned out or scared, don’t walk away—step back in with wisdom.

  • Now’s the time to double down on underwriting, asset management, and operator due diligence.

  • Don’t let emotion make the decision—look at the fundamentals and act accordingly.

  • If you're new, you’re actually at an advantage: no baggage, fresh eyes, better timing.

 

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