Q4 2022 Multifamily Investment Sentiment Survey

I asked Tactica email subscribers nine questions that could help shed light on the current multifamily investment environment. I think it’s interesting to see how other like-minded investors and industry professionals currently view the market, their insights, and their concerns.

*For mobile users, turn the device sideways for optimal viewing*

Investment Sentiment Survey

Question #1

What is your involvement in multifamily real estate (check all that apply)?

• Private Investor: 57.43%

• Syndicator: 23.76%

• Limited Partner (LP): 27.72%

• Industry Professional (broker, lender, analyst, associate, property manager, appraiser, architect, GC, etc.): 42.57%

• Other: 2.97%

Question #2

How do you currently perceive the multifamily real estate investment market?

• Extremely Overpriced: 11.88%

• Overpriced: 69.31%

• Fairly Priced: 10.89%

• Underpriced: 2.97%

• Extremely Discounted: 0.99%

• Unsure: 3.96%

Question #3

How much would cap rates need to increase in your market (basis points) to feel comfortable purchasing in the current environment?

• 250+ basis points: 7.92%

• 200 - 225 basis points: 13.86%

• 150 - 175 basis points: 22.77%

• 100 - 125 basis points: 24.75%

• 50 - 75 basis points: 11.88%

• 0 - 25 basis points: 2.97%

• I'd invest at lower cap rates: 4.95%

• Unsure: 10.89%

Question #4

How has your general perception and risk tolerance changed when evaluating multifamily investment opportunities from one year ago?

• It’s the same: 18.81%

• More risk-averse: 72.28%

• More aggressive: 6.93%

• Unsure: 1.98%

Question #5

What percentage of your investable assets are in cash (or another liquid state) to potentially take advantage of a multifamily pricing correction?

• None: 6.19%

• 1% - 10%: 13.40%

• 11% - 20%: 20.62%

• 21% - 30%: 20.62%

• 31% - 40%: 11.34%

• 41% - 50%: 8.25%

• 51% - 60%: 8.25%

• 61% - 70%: 4.12%

• 71% - 80%: 0.00%

• 81% - 90%: 2.06%

• 91% - 100%: 5.15%

Question #6

Would you consider investing in fixed income (T-bill, T-notes, inflation bonds, corporate bonds) instead of physical real estate?

• Yes: 20.79%

• No: 40.59%

• Maybe, given the right circumstances: 30.69%

• I haven’t considered it: 7.92%

Question #7

How do you think multifamily sales prices in 2024 will compare to similar comps that sold in 2022?

• >30% higher: 0.00%

• 21% - 30% higher: 1.00%

• 11% - 20% higher: 12.00%

• 1% - 9% higher: 19.00%

• The same: 12.00%

• 1% - 9% lower: 28.00%

• 11% - 20% lower: 22.00%

• 21% -30% lower: 6.00%

• >30% lower: 0.00%

Question #8

Are you worried about multifamily investment fundamentals over the next 2-year time frame?

• Yes: 27.27%

• Neutral: 32.32%

• No: 39.39%

• Unsure: 1.01%

Question #9

What do you perceive as the biggest challenge the multifamily industry will face in the short term (you can select multiple if applicable)?

• Higher interest rates/challenging capital markets: 84%

• Illiquidity: 21%

• Expansion of cap rates: 28%

• Declining rents: 28%

• Expense inflation: 45%

• Oversupply of units: 10%

• Renters' ability to make payments: 37%

• Vacancy: 12%

• Other: 5%

Survey FAQ: Responses were collected from 11/11/2022 - 11/17/2022. The survey was sent to 5,150 Tactica email subscribers.