We expect a mild recession or soft landing in 2024.
- We expect a return to economic growth in 2025 – 2031 (or perhaps longer). This is based on extensive analysis of the last six recessions.
- Mortgage rates dropped at least 1%, usually more, following every one of those recessions.
- When rates drop (likely near end of 2024), we’ll see a surge of buyers come off the sidelines.
- The buyer pool will increase much faster than the seller pool.
- As a result, with the current low inventory, there will be extremely high competition when rates first drop. This will drive a spike in prices.
- The price spike will help incent more sellers to come to market. We might get to an equilibrium in late 2025
- Our residential development projects should be delivered at about the perfect time to capitalize on this. However, our underwriting assumes NO APPRECIATION, so this is all upside.
- We think multifamily is the best segment for another year or two.