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A record 4,800 industry stakeholders descended on Las Vegas for the National Multifamily Housing Council’s Annual Meeting and Apartment Strategies Conference at the end of January.

In addition to bidding a fond farewell to past president Doug Bibby and welcoming new leader Sharon Wilson Géno, multifamily leaders weighed in on the market uncertainty and their predictions and insights for the year ahead.

Here are some key takeaways from the Apartment Strategies Conference:

1. Bumpy Road Ahead

Industry stakeholders agreed that the nation will see a mild recession or a softening in 2023, which will cause some pain for the multifamily market, during the “Multifamily Investment: A Conversation of Present and Future Value” panel.

“The seeds of recession have already been sown, but when does it show up? I don’t think the Fed can accomplish what they want to accomplish without a recession,” said Suzanne Mulvee, senior vice president of research and strategy at GID.

Cortland CEO Steven DeFrancis and Helen Garrahy, senior vice president of portfolio management at Heitman, agreed there’s going to be short-term pain for the industry.

“We’re still bullish on the long term. We still think the nation is generally underbuilt in housing in multifamily to some degree, unfortunately not nearly as much as it has been over the past 10 years. We are definitely making up for it quickly,” DeFrancis said. “Short term, we are going to experience some pain. We tend to be a Sun Belt market player, and I think those places are getting a lot of supply no matter where you are. I think the next two years will be a submarket by submarket question, depending on which submarkets you are in. There is a lot of supply coming everywhere, and we’re going to have softness.”

Garrahy added that she believes the industry is in a better position to absorb some damage than in past years because it has a cushion.

“The demographics are still in our favor, and we have a stickier renter by choice and by necessity because of the pressure of trying to move out and buy a home,” she said. “Also, you have a renter that has embraced some transience and more wanderlust in the way they live and work, which will keep them in our realm a little longer. We’re not expecting as much job loss to hit us, but there will be some. We definitely have to look at supply as a sector. In the short term, there will be supply pressure.”

Panelists agreed that it’s going to be bumpy for about 18 months.

“You just look at the supply wave, and depending on how much of that gets pushed, if people are able to do that, you don’t get through that wave until you’re into late 2024. The Fed is doing what it’s doing, in conjunction with trying to swallow this massive wave of supply, you have to get past that. I think that’s your time frame,” said Jackson Lapin, managing director of asset management at Invesco.

2. Supply Challenges


According to the National Association of Home Builders, multifamily construction boomed in 2022, up an estimated 15% from the previous year and exceeding a 500,000 annual pace of starts—the first time since the Great Recession.

“Some of these construction numbers are just absolutely incredible,” said Carl Whitaker, director of research and analysis at RealPage. “Look at Dallas-Fort Worth, 65,000 units are currently under construction. Places like Charlotte, North Carolina, and Austin, Texas, where 15% of all existing inventory is currently underway.”

Whitaker said what fascinates him is that the building is happening everywhere, like places such as Huntsville, Alabama; Provo, Utah; and Colorado Springs, Colorado, and not just located in big urban centers.

“What will be most interesting to watch within that tranche of markets is that some of these metros are probably going to age like wine, and some are probably going to age like Beanie Babies. I think the difference between those that age fine and those that don’t are which of these markets don’t have the local demand drivers.”

3. Markets to Watch


During “The Apartment Markets” session, panelists weighed in on the glass-half-full and glass-half-empty markets on their watch lists.

Because of solid demand drivers, Whitaker selected Central and South Florida and Dallas-Fort Worth, which even though it is seeing a lot of supply, the demand story is strong.

“Don’t discount Southern California, whether it be Los Angeles, Anaheim, or San Diego, I think there’s a lot of strength there,” he added. “New York and Northern New Jersey, I think longer term probably starts to settle into their middle of the pack ranking, but over the next 12 to 18 months I think the outlook there is really solid.”

Quinn Eddins, managing director of research and analytics services at Greystar Real Estate Partners, said he thinks Orlando, Florida; New York; and Miami will continue to be strong. He added that his one market that might surprise people would be Albuquerque, New Mexico, which was very steady and well above national averages in 2022, particularly at the end of the year.

In addition, Jay Lybik, national director of multifamily analytics at CoStar Group, cited Miami; Columbus, Ohio; and San Diego as strong markets for 2023.

“The glass that could go either way, I think this is where the supply story will be a key indicator,” said Whitaker. “Nashville, Tennessee, and Austin both look really good, but can they maintain enough demand under this amount of new supply? I think there are two potential outcomes there.”

For those markets not faring well, Whitaker cited West Coast markets that have challenges, whether legislative, migration, or local economy, and the migration boom markets like Las Vegas and Phoenix that probably will go through a near-term adjustment.

For Eddins, he listed Nashville and Spokane, Washington, as his watch markets because of the new supply relative to the markets. He also added Boston, which had very strong lease-over-lease growth in the summer of 2022 but had declined by the end of the year.

Lybik said he is closely watching Atlanta, Austin, and Phoenix. “These markets are going to be challenged in the short run, and the question will be, will they be able to in 2024 and 2025 get their demand engines going again to soak up that construction that is being built right now and get above average rent growth again?”

Whitaker added a bold claim to his picks. “I wouldn’t be surprised if a market within that traditional slow and stable part of the country—the Philadelphias of the world—sneaks into the top 10 by the end of the year, and for no other reason than in periods of a lot of uncertainty, those Midwest and Rust Belt markets tend to be very stable buoys in otherwise stormy waters. It wouldn’t be surprising if you see a Columbus, Ohio, or Cincinnati sneak in to the top 10.”

4. Don’t Count Out Urban


Urban downtown locations are not dead, said Lybik. He examined 14 major downtowns across the nation, including Atlanta, Boston, Dallas, and Los Angeles, that rebounded in 2021 and stayed positive throughout 2022.

“The takeaway is there are more people living in these downtown submarkets today than pre-pandemic and by a pretty good measure,” he said. “To me, the consumer still wants to be in these locations regardless if they are going into the office or not because there are things there that they desire and things that they want. Under no circumstances do I think that there’s a direct correlation between whether people go back to the office or not and its impact on urban multifamily.”

5. Power of People


During the “In the Mind of an Apartment CEO” panel, Bell Partners president and CEO Lili Dunn emphasized the importance of being committed to your employees as well as other lessons for positioning your company for the future, particularly during a market inflection point.

“We have a long-term perspective, and I think that’s important to keep in mind the broader view of where you’re going to be a sustainable, scalable company that can deliver great returns over both cycles—the ups and the downs. To be able to do that, the No. 1 thing is to invest in your people and your culture; whether you’re in a hot market or a cold market, people are critical to success,” said Dunn. “Second, you need to know where you are going. What is your strategic plan? That’s not something you do every year, it’s usually every four to six years, and it’s your North Star. Make sure that everyone is aligned in your purpose. Of course, you have to make adjustments along the way for opportunities and market inflections, but don’t forget where you’re going. And, third is a balanced approach to risk.”

Dunn added that relationships are critical as well. “Communicate, communicate, communicate internally and externally, and that’s a big part of keeping your folks and also keeping your relationships with your investors and clients. Be transparent, authentic, appreciative, proactive, and consistent with your communications.”