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Marcus & Millichap: Investor Capital Will Return to Multifamily
Although positive momentum is gathering across the national multifamily landscape, vacancy and rent growth rates haven’t responded in kind, Marcus & Millichap says in its 2024 Multifamily Investment Forecast. Developers are on track to open approximately 480,000 doors in 2024, putting additional supply pressure on the market.
However, barriers to homeownership are similarly high, the report states, citing both “elevated mortgage rates and stubbornly high sale prices.” These factors will delay first-time purchases for many current renters.
On the multifamily investment sales front, deal velocity has realigned with historical norms following two years of record trading, “as the sharp rise of interest rates widened the price expectation gap between buyers and sellers,” according to Marcus & Millichap. “Yet, slower rent growth, elevated vacancy rates and higher operating costs have also weighed on seller motivation.”
Additionally, investors have yet to see “the much-anticipated deluge of properties driven to market by maturing debt, higher refinance rates and tighter debt service restrictions,” the report states.
That being said, Marcus & Millichap expects capital to begin gravitating toward multifamily at both the institutional and private levels, “facilitating price discovery and helping to narrow the price expectation gap.”
- ◦Sale/Acquisition
