Trend Report is out: Multifamily Crises Trends are winding down, right?  No, Not even close!

(August 26, 2024) — The Multifamily issue of Trend Report is out, and here are my insights for it! If you would like a complimentary copy, please visit us at TrendReportAZ.com to Connect.

We’ve been deluged with multifamily news lately. My inbox contains many new studies, findings, projections, conclusions, and general information. So, let’s take a few minutes to catch up on the news.

First, housing makes up 27% of the Arizona construction market. Second, the multifamily Arizona construction market share is valued at $7.3B. Third, the U.S. is on pace to Shatter the Delivery Record for multifamily units with 1 million this year.

The bad thing about reaching peaks, however, is troughs inevitably follow.

Scott Scovall, as a banker and investor, focused on The Fed Only Cracking Open the Rate Door and explained the reasons, specifically how it applies to multifamily developments. Setting expectations and warning not to expect our Fed to lower FFR as soon as the market is pressing it to do so.

In the City of Tucson Honing Tools for Corridor Redevelopment, Koren Manning has good news on a city-wide zoning tool that will enable the redevelopment of sites along the City’s commercial corridors to allow for more affordable and workforce housing. They’re looking for feedback.

In February, the Pima County Board of Supervisors awarded $6.875 million to eight projects to develop or preserve 835 affordable housing units. Desert Dove Apartments: Arizona’s “YIGBY” Yes to God’s Backyard Project is one of the eight projects awarded $1 million.

Jim Tofel of Tofel Dent Construction gives us his perspective on Multifamily Construction in Southern Arizona Update and the challenges facing developers.

So, with all these new units coming to market, the housing supply and affordability crises are winding down, right?

No. No, they’re not. Not even a little.

The problem is as simple as the solutions are complicated. As Will White explores in The Tucson Multifamily Land Market in 2024: Onward at Different Angles.

Thanks to Allan Mendelsberg and Joey Martinez’s Marketbeat Tucson: Multifamily Report 2Q 2024.

Thanks to Robert Carreira, we learned that Cochise County Sales Across Major Industries were down for a Third Consecutive Month.

Paraphrasing longtime Trend Report resource contributors Kevin and Brian Prouty with CBRE “Perhaps the biggest change to multifamily financing markets has been the recent decline in treasury yields with volatility the name of the game!”

We appreciate Robert Trujillo and Nathan Shooks with Harvard FirstStreet Development report on Metro Phoenix leading the U.S. in build-to-rent completions in Amenity-Rich BTR Communities are Taking the Metro Phoenix Rental Market by Storm.

Not to be repetitive, but Berkadia Multifamily Report 2024 \ Mid-Year agrees with the others and breaks down the numbers to a submarket level for Tucson.

Ending the issue with Tucson MSA Multifamily Construction Activity, with 1,371 units delivered through August 2024.

Studies show a national need of 4.5 million and a statewide need of 270,000 homes. Given record deliveries in the face of rising land costs, decades-high interest rates, more restrictive lending standards, labor shortages, supply chain and materials challenges, zoning and entitlement difficulties, drawn-out permit and plan approvals, and a nearly endless list of other problems, what the market has delivered is impressive.

It is not, however, enough, and it is most certainly not an oversupply.

We sincerely thank everyone who participated in this Trend Report issue!

We are also grateful for the Trend Report team: Patti van Leer, Michael Rossmann, Melissa Vucijevic, and Jack Paddock.

We’ve already started work on our next “Office Market” issue. You won’t want to miss this one, but I know I say that every issue.

As always, we appreciate your feedback and welcome your comments. Come tell us “Hi” at https//trendreportaz.com under the “Connect tab.”

Stay Sharp with Actionable Insights!

Karen Schutte, Editor