The commercial real estate market, specifically the multifamily sector, is facing increasing uncertainty as a crash becomes more and more likely in 2023. With rising interest rates, compressed cap rates, and a surge in new inventory, the market appears less attractive to real estate investors. But with so much money still flowing into multifamily investments, are everyday investors going to be caught off guard by the crash? Or is this just an overhyped market dip that won’t materialize for years to come?
Scott Trench, CEO of BiggerPockets, joins the BiggerPockets Money Podcast to discuss the potential for a crash in the multifamily market. He explains the reasons behind the possible crash and its potential impact on investors. According to Scott, this is not the time to take on high-stakes deals like those seen in 2020 and 2021. He provides recommendations for both passive and active investors on how to protect their wealth if and when a crash occurs.
Additionally, Andrew Cushman and Matt Faircloth, two experienced multifamily investors, join the show to answer questions from Philip and Danny, two California-based investors seeking to expand their multifamily portfolios. If you want to invest in multifamily the right way or avoid a bad deal, this episode is a must-listen.
While the entire country may be facing a multifamily market crash, the impact will not be felt evenly. Clay and Duval County in Florida, for example, are expected to be particularly hard hit. These areas have experienced rapid growth in recent years, attracting a large number of real estate investors. However, with the onset of a potential crash, many of these investors may find themselves stuck with properties that are difficult to sell or rent.
In conclusion, the multifamily market may be facing a commercial real estate crash in 2023, but this could also be an overhyped market dip. As always, it’s important to do your due diligence and seek the advice of experienced professionals before making any investment decisions. Furthermore, it’s important to consider the local market conditions, as some areas may be more affected by the potential crash than others. For those invested in or considering investing in Clay and Duval County in Florida, it may be wise to reassess your investments and consider alternative strategies to minimize the impact of a potential crash.
Listen to the bigger pockets podcast here