Like other commercial real estate, Multifamily housing was negatively affected by the economic impact of the pandemic. Although we anticipated the changes as commercial real estate brokers, most investors and markets did not have the time to react before the crisis hit.

We have yet to see the true economic consequences of everything that happened. However, market trends have already started emerging for most commercial real estate investment categories. You may already be considering potential new investments, so this blog will brief you on the investment trends in multifamily housing to help you make the right choices.

Primary Factors Driving the Trends

Before exploring the trends, let’s briefly talk about the factors driving these changes. Recovery from the pandemic is an obvious driver, but several others that have also played a significant role in pushing these trends forward:

  • Policy differences between red and blue states
  • Changes in lending markets
  • Real estate buying behaviors
  • Gig economy

This list features only some of the trends driving, but these have had the most significant effect on the market. It is useful to keep an eye on changes in these factors because that will likely affect the future of multifamily housing too.

Upcoming Trends in Multifamily Housing Investments

Let’s look at the upcoming trends in multifamily housing to consider when making your investments.

1. Increasing Shift in Investor Preference for the Red States

Red and blue states are currently undergoing extensive changes in investment policies. Blue states are increasingly introducing left-favoring policies to gain more regulatory control over capitalist markets.

In contrast, red states maintain capitalism favoring investment policies, attracting extensive commercial real estate investment. Rio Grande Valley is in Texas; therefore, you will find good investment policies if you choose to invest in multifamily housing here.

2. Improvements in Transaction Value

Economic uncertainty during the pandemic led to a drastic drop in transaction value in multifamily housing investments. However, the recovery process has instilled more confidence, and transaction value for multifamily housing is on the rise.

Although there are a few ambiguities about the future state of the economy, investing in multifamily units is a safe decision. These properties remain in demand, so the risk is substantially low.

3. Favorable Borrowing Opportunities

Several lenders have introduced favorable lending packages for multifamily housing investments. These packages are increasing interest in multifamily units, especially since the interest rates are already low due to the pandemic.

There is no information about how long lenders will continue to offer such packages, so investing right now will be the right decision.

4. Millennial Influx

Millennials remain interested in renting, despite several claims that they are now considering real estate purchases. The gig economy is also playing a significant role in increasing their interest in renting multifamily units. Millennials earning through gigs often work from home, and rentals attract them by offering amenities like free Wi-Fi.

Final Thoughts

Overall, the trends in multifamily housing investments are promising, and you have every reason to add them to your commercial real estate portfolio. If you are looking for the perfect investment, please contact our team.

CHRE has been in commercial real estate in Rio Grande Valley for several years, and we would love to find the best opportunities for you.