The Gray Report Podcast

Katrina Greene is the Director of Property Management for Gray Residential, and her upcoming podcast, The Complex, will detail the complicated and crucial aspects of managing apartment properties. For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠ Sign up for our free multifamily newsletter here: ⁠https://www.graycapitalllc.com/ne...

Multifamily capital markets have seen the greatest drop in transaction activity compared to other CRE sectors, but all CRE markets have seen lower sales numbers in the current interest rate environment. As members of the Fed meet in Jackson Hole, the potential for an extended high-interest-rate regime could have a significant impact on commercial real estate. Sources discussed in this episode: All...

Berkshire Hathaway's recent investment in homebuilding companies is a sound endorsement of the housing sector and continued strong demand for homes, and Warren Buffet's new focus is supported by decreasing building material costs and increased permitting and starts for single family home projects, indicating continued interest in purchasing a home, even as mortgage rates make home ownershi...

Mid-year updates and forecasts for the apartment and CRE markets uniformly note the improved economic conditions compared to the start of the year, but forecasts for rent growth and capital markets are diverging. Under one scenario, a recession in late 2023/early 2024 will prompt an interest rate reduction that could stimulate CRE capital markets, but under an alternative scenario, we are spared f...

Rent growth trends continue to moderate from last year's historic peak, and many of the top markets of last year have seen much lower rent growth due to the influx of apartments. Strong GDP numbers and a healthy job market , however, support continued housing demand and economic stability despite the elevated interest rate environment. Sources discussed in this episode: CoreLogic : “US Home Pr...

The Federal Reserve raised the federal funds rate by 0.25%, and while Federal Reserve staff "are no longer forecasting a recession," others are more confident in a recession as the inevitable product of this lengthy period of elevated interest rates. Amidst this continuing economic uncertainty, the multifamily market has shown solid demand. That being said, nationwide rent growth project...

While there has been more optimism about the economy generally, apartment rent growth continues its moderation on a national level, with some notable regional variation. Unlike more costly markets in the West and South, recent apartment rent growth reporting highlights the consistent growth of more affordable multifamily markets in the Midwest, a trend that also extends to the homebuying market. S...

The CPI recorded another substantial drop in inflation, which should ease some financial burdens for renters and could act as a signal to the Federal Reserve Bank that interest rates need not increase any further. The resumption of student loan repayments this August could have a more direct impact on apartment demand, and three separate reports this week review the implications of student loan re...

The multifamily market continues to steadily improve, with solid underlying fundamentals but softer demand in areas that have seen a major influx of supply, a situation that lines up with the mixture of positive and negative indicators for the broader housing market and for the economy as a whole. Both home prices and rents have recently shown negative year-over-year numbers, but they are increasi...

The multifamily market continues to steadily improve, with solid underlying fundamentals but softer demand in areas that have seen a major influx of supply, a situation that lines up with the mixture of positive and negative indicators for the broader housing market and for the economy as a whole. Both home prices and rents have recently shown negative year-over-year numbers, but they are increasi...

With office real estate suffering as remote working arrangements persist and drive down demand for office space, there is increasing attention on the broader impacts and knock-on effects related to the shift away from the office. Commercial real estate lenders have yet to panic, even in this environment of high interest rates and low transaction volumes, and while multifamily valuations have also...

With the Consumer Price Index showing declining annual inflation, (from 4.9% in April to 4% in May) and low, 0.1% month-over-month inflation, the Federal Reserve's decision to keep interest rates level is understandable, but Jerome Powell's remarks did not indicate that rates will go down any time soon. Even as these paused interest rate increases bring a glimmer of hope that CRE capital m...

The drumbeat of coverage on commercial real estate loan trouble continues this week as strong jobs numbers fuel more uncertainty about inflation and economic strength, and while the multifamily market has shown stable rent growth, there is a high amount of regional variability. With the exception of Texas markets and the indefatigable growth of Miami, a number of Sunbelt markets have had negative...

Signs of positive signs for job growth and housing demand are at odds with sluggish commercial real estate capital markets, but key developments could spur more activity among investors and property owners. Sign up for our free multifamily newsletter here: ⁠ ⁠https://www.graycapitalllc.com/newsletter⁠ Sources discussed in this episode: CoreLogic: “US CoreLogic S&P Case-Shiller Index Posts a Sm...

Fannie Mae predicts recession, Freddie Mac expects interest rates to remain elevated for the long term, and there is growing attention on the impact of upcoming loan maturities in the multifamily investment market. Continued signs of growing housing demand support the strong fundamentals of the multifamily market, but investment sales activity remains low in the current high interest rate environm...

The potential for distress looms large over the commercial real estate market, and a recent report notes that the multifamily market "has the most significant amount of debt maturities coming due," and "pricing is off the most of any asset class." With elevated interest rates as a persistent challenge, these debt maturities could have a major impact on multifamily pricing. At t...

New rent growth data cements a robust positive trend for multifamily performance, with four consecutive months of increasing monthly rent growth and forecasts that Q2 rent growth could exceed pre-pandemic averages if current trends continue. On the other hand, the rent growth measured in the Consumer Price Index , (0.6% month-over-month and 8.8% year-over-year), continues to misrepresent the curre...

The Federal Reserve increased the Federal Funds rate by 25 BPS, breaking the 5% barrier in a rate hike that was largely anticipated by the markets, but with comments by Fed Chair Powell indicating a pause in interest rate increases, the next meeting of the Federal Reserve could be a significant indicator of the Fed's path going forward. As the FOMC anticipates economic decline, the multifamily...

Despite a report from Fannie Mae downplaying the region's performance, Midwestern markets have been a major contributor to the upswing in national rent growth. Sources discussed in this episode: RealPage: “U.S. Apartment Market Rallies After 3+ Volatile Years” - https://www.realpage.com/analytics/volatile-us-apartment-market-calms/ Fannie Mae: “Multifamily Economic and Market Commentary” - htt...

A recent article from Charles Schwab claims that the Federal Reserve will avoid further rate hikes, but these lower interest rate forecasts are accompanied by the expectation of an economic downturn. In the multifamily market, a recent rent growth report has recorded a rare year-over-year rent decrease, but when viewed alongside numerous other reports showing improving performance for multifamily...

The latest numbers from the Consumer Price Index showed lower-than-expected inflation, but uncertainty (or pessimism) regarding the Federal Reserve's interest rate path has dampened some of the enthusiasm about the inflation news. This uncertainty is keenly felt in the still-stagnant apartment sales market, but when it comes to apartment demand, solid positive rent growth trends are a clear hi...

High home prices were a prominent subject two years ago, and despite a dip in values, still-elevated home values and high mortgage rates have kept the topic in conversation. While multifamily investors are familiar with these issues for homebuyers and their implications for the rental market, the enduring nature of this buyer-renter gap will lead even more families and individuals priced out of ho...

Following the high profile bank crises earlier this month are worries regarding commercial real estate debt, but while multifamily investors continue to wait for distressed assets and buying opportunities that have yet to arrive in significant numbers, office properties are under greater stress, with  growing   concern   of   a   crisis  in the office real estate market that could contribute to a...

The Federal Reserve's just-announced rate hike of 25 BPS puts more strain on an economy under increasing pressure, and commercial real estate markets are among the many areas of the economy that are vulnerable to these rising rates. At the same time, the the growing chasm between expensive mortgage payments and more-affordable rental prices will continue to bolster multifamily demand and drive...

The collapse of Silicon Valley Bank is linked to the same assumptions of persistent low interest rates that have contributed to the higher potential for distress in the multifamily market. Recent reports, however, show positive momentum for apartment demand, especially in Midwestern markets with less growth in apartment supply. Sources discussed in this episode: CNN: “The Latest on the Silicon Val...