Author: Multifamily News

Condo Prices Dropping Faster Than Single Family Homes

Condo owners are struggling with the worst market in more than 10 years. Prices for U.S. condominiums posted their biggest annual decline since 2012.

The condo market’s softness reflects ways the housing market and buyer preferences are evolving. Many condo buildings are located in urban downtowns, which are less attractive than they used to be for people who now work from home at least part-time. Condos are popular in second-home markets, which have suffered from a slowdown in demand.

Rising homeowner-association fees due to higher insurance premiums and maintenance costs are also making condominium purchases less affordable. Another challenge for condo owners is that it can be difficult for buyers to get mortgages for units in buildings that need major repairs or don’t have enough property insurance.

Source: Wall Street Journal

United Van Lines’ 2026 National Movers Study

The top inbound states of 2025 were:   

  1. Oregon  
  2. West Virginia  
  3. South Carolina  
  4. Delaware  
  5. Minnesota  
  6. Idaho  
  7. North Carolina   
  8. Arkansas   
  9. Alabama  
  10. Nevada  

The top outbound states for 2025 were: 

  1. New Jersey 
  2. New York  
  3. California 
  4. North Dakota 
  5. Colorado 
  6. Mississippi 
  7. Massachusetts 

Couple Key Notes:

Major southern migration magnets like Texas and Florida — historically powerhouse inbound destinations — are now experiencing balanced migration patterns, reflecting how rising housing costs are beginning to constrain even traditionally attractive regions.

A broad migration shift toward smaller cities and towns is redefining American relocation patterns.

Source: United Van Lines

John Burns On The Rental Market Entering 2026

Master Planned & Build-To-Rent Communities:

  • There’s been a dramatic shift in Master-Planned communities since 2018. Master-planned developers initially resisted rental components, but now nearly all are incorporating them. They’ve discovered that renters often become homebuyers within their communities, providing earlier land sales and better cash flows.
  • Build-to-Rent is in the early innings and remains a huge long-term opportunity. With 11-14 million people renting homes compared to 24-30 million apartment renters, the industry should be building around 150,000 rental homes annually (currently falling short). BTR will remain cyclical in the short term (based on the economy), but he views it as a decades-long investment opportunity when you zoom out and look at the bigger picture.

Key Demographic Shifts Shaping Future Demand:

  • Essentially zero growth in the 25-34 age group over the next decade. Builders need to rethink standard apartment development projects where they assume college graduates will be there to lease them up.
  • Major growth in 45-54 and 75+ populations. While assisted living will benefit, other segments will as well. There are many lifelong renters in the 45-54 age group that appreciate certain types of amenities and apartment styles. A.I. will improve lifespans and health, even for those in the 75+ bracket.
  • More young people living alone (boosting one-bedroom demand). People used to always live with other people and never live with their parents. More people are living with their parents, but when they move out more are living alone.
  • Fewer divorces and children, changing household formation patterns. People have less need to move up in size to a home if they do not have children.

New Supply and Immigration:

  • While new supply has the effect of lowering rents for all properties (class B renters move up to discounted class A units and class C renters move up to discounted class B units), the opposite effect happens with immigrants. They fill class C properties which pushes tenants up to class B, which pushes tenants up to class A, moving rents upward across all properties.

Renting vs. Buying Affordability:

  • The gap between the all-in cost of owning a home (mortgage, taxes, insurance, etc) and renting a similar style home at $1,400 per month. The historical gap is closer to $300 per month.
  • Burns thinks the Fed’s inflation target is 2.00% and the Fed Funds rate target is 3.50% (150 basis points above the inflation rate). Historically the 10-year treasury is 100 to 140 basis points above the Fed Funds rate, which would be 4.50%. Mortgage rates are typically 150 to 200 basis points above the 10-year treasury which would mean they’re in the low 6% range (which is right about where they are right now).
  • That will create a tailwind for the apartment market for many, many, many years because it will remain much more affordable to rent than own for an extended period.
  • That means there is going to be continued pressure on home buying affordability, which will continue to be very positive for apartments and build-to-rent communities.

Source: The Rent Roll Podcast

Job Growth Is No Longer The Most Reliable Indicator For Rent Growth

The balance between job growth and rent growth—once a reliable indicator for multifamily investors—has become harder to read. Despite a cooling labor market and record apartment construction, the usual patterns linking employment gains to rising rents no longer hold as tightly.

While job growth has historically had a meaningful, positive impact on multifamily rents, the past few years have upended that relationship.

The labor market weakened this year, with total job growth in the third quarter reaching 187,000—a 53.1% year-over-year decline—and unemployment inching up from 4.0% in January to 4.4% in September. That kind of slowdown would typically damp apartment demand and pull down rents. 

Analysis has found that, in 93 of 99 quarters studied, metros with higher multifamily delivery rates experienced weaker rent growth, even after accounting for job growth. Conversely, 94 of the same quarters showed stronger rent gains in areas with faster job growth, once new supply was controlled for. 

Yet those correlations have shown signs of breaking down. The pandemic, remote work, and the uneven return to offices may have tightened or disrupted labor-housing linkages that once seemed dependable. Demographic shifts—such as an aging population—and heightened supply volatility could also be adding complexity.

Taken together, the data suggest that while job growth continues to shape rent trends, its influence is now mediated by new market dynamics. The multifamily sector’s long-trusted economic compass is no longer pointing straight.

Source: Globe Street

Public REITs vs. Private Real Estate

Publicly traded REITs (dark blue circles) currently have a higher occupancy and trade at a higher cap rate than private real estate (light blue circles) in the same category.

“I have less than 1 percent of my net worth outside of Berkshire, but basically I had that portion all in REITs. They were all small ones at that time. They were selling at discounts. At that time they were selling at discounts to the values of properties.”

– Warren Buffett 2005

“REITs are way more suitable for individual shareholders than for corporate shareholders. And Warren has enough residue from his old cigar-butt personality that when people became disenchanted with the REITs and the market price went down to maybe a 20% discount from what the companies could be liquidated for, he bought a few shares with his personal money. So it’s nice that Warren has a few private assets with which to pick up cigar butts in memory of old times – if that’s what keeps him amused.”

– Charlie Munger

Multifamily REITs Currently Trading At Large Discount To Net Asset Value

Since 2000, apartment REIT implied cap rates and private transaction cap rates have both averaged ~6.2%. REIT cap rates were lower 48% of the time, and higher 52% of the time. When REIT cap rates are higher, it generally means the stock trades at a discount to Net Asset Value (often determined using the transaction cap rate), implying the underlying real estate is more valuable than ownership of REIT shares.

Transaction cap rates were lower than REIT implied cap rates for most of the 2000s, however, REITs traded at a premium from 2010 through 2019 (5.2% vs 6.0%). Since 2022, REIT implied cap rates have come in 50 to 150 bps lower than transaction cap rates, translating to a significant NAV discount. The current 100 bp spread (6.5% vs 5.4%) translates to a ~20% REIT NAV discount for apartments overall.

When MAA sees an acquisition opportunity, say a mid-2010s vintage mid-rise in Dallas – they will likely need to pay a low 5 cap rate. They could instead use the cash to buy their own shares back at a 6.7% cap rate – quite the difference. Furthermore, they could choose to dispose of this asset (as they already own a few mid-2010s midrises in Dallas) at a low 5 cap and use the proceeds to buy back shares.

Source: Wes Stayton’s LinkedIn

Multifamily Rent Concessions Move Higher With Seasonal Weakness

The use of concessions tend to be greatest during November and December as operators seek to capture renters from the reduced prospect pool. Those seasonal trends persisted throughout 2025. Nationwide, 16% of stabilized apartments offered concessions in November.

The average discount in November was 10.2%, the highest level since September 2024. By product class, concessions were greatest in Class A (10.8%) and Class C (10.3%) units, while Class B product posted a slightly smaller discount of 9.8%.

Meanwhile concession prevalence was overwhelmingly greatest in Class C units in November, with 20.7% of units offering discounts. Use of concessions in Class A and Class B was comparatively milder, hovering around 14%.

Source: RealPage