SAN FRANCISCO, CA -- Brian Sykes, Boston-based SVP of Capital One Multifamily Finance, reviewed the findings of surveyed multifamily industry participants at the RealShare Apartments conference to assess market sentiment for the coming year.
“What is the one topic that keeps you up at night?” More people named global uncertainty (34 percent) than interest rates rising (23 percent). Sykes added, "I think we’ve come to think of Treasuries in the 2 percent range as normal. Clearly, when it comes to interest rates, we need to recalibrate our expectations."
That is about to change. Expect higher interest rates as the new normal.
Balance that with another observation by Sykes: "The second finding that surprised me was the number of survey participants who said they would be net buyers in 2017 (51 percent) as opposed to net sellers (20 percent)." The reason is clear as he observes. "All the fundamentals point to continued growth in multifamily. With unemployment down substantially and housing prices on the rise, renting is an attractive choice, especially for millennials."
All real estate asset classes will experience uncertain impact -- except mult-family. It's the simple case of supply and demand, or the dynamics of the market. That's where many investors are placing their investment bets and risks.