The real estate market is always changing, and right now, there’s a unique opportunity for investors who are ready to act. Recently, there’s been a noticeable slowdown in apartment construction across the country. According to a recent article from the Wall Street Journal, new multifamily building starts has dropped significantly-;down 41% from its peak in April 2022. This change is largely due to higher interest rates, which have made construction loans more expensive and have decreased property values. As a result, many developers are pausing their projects, but this slowdown opens a window of opportunity for those looking to invest in existing properties.
When fewer new apartments are being built, the demand for existing properties tends to increase. This can lead to higher property values and rents, benefiting those who own or invest in these properties. The Wall Street Journal highlights that large investors, like private equity firms KKR, Brookfield, and Blackstone, are already taking advantage of this trend by purchasing billion-dollar portfolios of existing apartments. For instance, KKR recently spent $2.1 billion to acquire more than 5,200 apartments, betting that as new construction slows down, the market will shift in favor of property owners, with rent growth expected to pick up by 2025.
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