“Multifamily housing has been one of the top performing sectors in commercial real estate over the last several years. However, Axiometrics and NMHC both recently published quarterly reports stating that the GSE’s have tightened their funding restrictions affecting the availability of capital while rent growth has moderated. Are these trends an indication that the multifamily market is peaking and is poised for a further slowdown or a decline?
Most of the experts at the RealShare Apartments Conference in Los Angeles did not believe so. Both of these reports were gathered from Q2 data and factors such as the GSE’s loosening their funding restrictions in Q3 led Rick Graf, President of the Pinnacle Family of Companies to state, “I believe it is not quite as dismal as NMHC painted.”
Even if the agencies again tighten their restrictions, it is not predicted to have a significant impact on the availability of capital. The MBA estimated that in 2012 the GSE’s provided only half of the financing for multifamily properties and they expect that number to hover at approximately the same levels through 2013. That means that banks, life companies, CMBS lenders and others are already financing a substantial portion of the market, which is a much different scenario than in 2009 when the GSE’s were 85% of the lending in the marketplace.
