Never have we spent so much time in our homes. Median prices are at their highest level in generations. A supply shortage and interest rates that are on the floor — and likely to stay there for some time — mean prices continue to rise. The national median home sale price is up roughly 58% since 2009 to $313,200. In the last decade, as prices rose, home ownership rates slowly declined. In 2016, the homeownership rate in the U.S. was 62.9%, the lowest level since 1965. Four years later, the home ownership rate neared its peak reached before the housing crisis, 67.9%, with much of the uptick being driven by cheap borrowing costs. However, the pandemic has caused rates to fall back to 65.8% as of Q4 2020.

In the same time period, growth in national rental rates has been somewhat tempered, rising 37% to $1,462. For multifamily investors, these increases pale in comparison to property prices. Nationally, the price-per-unit (PPU) that multifamily properties are selling for is up a whopping 156% since 2009 to nearly $160,000 from $62,371. Some large markets like Manhattan, San Francisco and Seattle had PPU increases north of 200% in 10 years.

Online marketplaces have put immense pressure on brick-and-mortar retail. At the same time, Industrial properties have been bifurcated into either essential or nonessential, with the latter being more susceptible to market fluctuations, like manufacturing, while logistics and fulfillment thrive. Multifamily as an asset class is positioned somewhat better during market downturns simply because there is always demand. People have to live somewhere. But as always, some markets are better than others.

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