Financing hurdles, potential rent growth slowdown spark volatility as 2023 begins
SANTA BARBARA, Calif., Feb. 22, 2023 – U.S. multifamily market investors, who powered a near-record sales year in 2022 but face significant volatility this year, are gravitating toward Sun Belt markets with strong job and population growth, according to a new research bulletin from Yardi® Matrix.
Despite a sharp second-half slowdown, last year’s $187 billion transaction volume was the second-highest annual total ever. In 2023, with higher financing costs, rising debt service payments and a slowdown in rent growth looming, “the flow of capital continues to trend toward the Sun Belt,” which includes 2022 sales volume leaders Atlanta, Phoenix, Dallas, Houston, Miami and Orlando, Fla., the bulletin says.
Each of these metros is in a state that has recorded above-trend population growth in recent years. The Southeast, Southwest and West regions accounted for $148 billion of sales in 2022, 79% of the total.
Even as they ride out the current wave of market uncertainty, many investors still “view multifamily as a safer place to park capital than other investment products or other commercial property classes such as office or retail,” the bulletin reports.
Get up to date on the state of multifamily investment including key volatility factors and a 2022 sales recap by region, market type and volume from the full Yardi Matrix bulletin.
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