For better or for worse, our nation's capital provides a bellwether for our industry, in a couple of ways.

D.C. was the first metro to recover from the Great Recession; in fact, it largely made it through unscathed. Developers enthusiastically flocked there, and cranes continue to swing all over the city, a fruitfulness that multiplies out to the first-ring suburbs.

But as more units flesh out from the drawing board to bricks and sticks, the chatter has become, “When will D.C.'s bubble burst?”

The metro may have been the first market out of the recession, but it may also provide some clues about the wisdom of exuberance. Just how many new units can the market bear before fundamentals take a hit? Are we kidding ourselves thinking that “renter nation” can go on forever—are we drinking our own Kool-Aid?

It's not just cranes that are up in the air around D.C. As we get steeped in another heated election season, the outcome of the presidential and congressional races is anybody's guess.

Yet, many issues central to multifamily finance hang in the balance. GSE reform, tax reform, and the impact of Dodd–Frank regulations on the banking and CMBS sectors may profoundly alter the capital markets. There are pros and cons for our industry on both sides of the aisle, as we explore in “In the Balance.”

It's not only election time, though—September marks the budgeting season, as well. For many companies, it's a time to look ahead and bank upon your best, most informed guess. And as our annual CFO Strategies Survey feature shows on page 18, the industry momentum toward bullishness has only accelerated.

But with all the uncertainty around where interest rates are heading, not to mention the immediate futures of Fannie, Freddie, and HUD, some caution is in order.

A friend of mine likes to tell a story about snatching defeat from the jaws of victory, and I always think of it whenever I think something is a surefire, can't-miss slam dunk.

When he was in college, he and a friend went out to a bar the night before a final exam. They had studied long and hard, and were confident in their mastery of the subject. So, what's wrong with a little drink to unwind?

Well, one drink leads to another, they meet a couple of girls, and, long story short, they wake up the next morning to find they had overslept and missed the exam. Frantic, they run back to the professor and plead, “We got a flat tire on the way to class—please give us a makeup exam.” The professor agreed, and they were ecstatic the lie had worked—that they had their cake and could eat it too, in a sense.

The next day, the professor made them take the exam in separate rooms. But when they saw the test, they were crushed. There was only one question: “Which tire?” Needless to say, they flunked—it was the only question they weren't prepared for.

We know a few things about the immediate future: that rental demand should stay strong, driven by crazy-good demographics; that we're on an upward trajectory; and that it's a good time to double down and let the good times roll.

But a modicum of caution is always in order, even, or especially, on the way up—it's always healthy to respect all that you don't expect.

As my mom likes to say, “Just when everything's going right, that's when the big thumb comes down from the sky and squashes you down.”