The housing market remains on solid foundation amid a shortage of homes and growing rates of new households.
Real estate outlook key takeaways
Financing remains relatively cheap, and cash flow from properties is strong.
Multigenerational housing, already on the upswing, was accelerated by pandemic conditions.
Housing market trends
Despite rising costs, we do not believe housing is headed for a crash.
While we expect to see sharp deceleration of appreciation in home values in the second half of the year, as well as some price corrections, the housing market remains on solid foundation, given the long-term housing shortage and growing rate of household formations.
How will rising inflation and interest rates affect real estate fund investors? Depending on the latest headlines, the answer to this question could vary widely. A holistic view shows that real estate funds appear to be staying the course and factoring in a slight overall cooling of the market. This sentiment is apparent in fundraising, as the volume of sales transactions and related cap rates achieved in those transactions have both eased.
Real estate investment trends
Real estate investment is slowly cooling, not falling off a cliff.
For the better part of the past decade, investors flocked to senior living as the baby boomer generation aged. More recently, due in large part to pandemic-related challenges, including health and safety considerations and staffing shortages, assisted living and senior facilities have lost their luster. Meanwhile, among seniors’ viable alternatives, multigenerational housing is gaining in popularity.
RSM contributors
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Sarah McKevittReal Estate Senior Analyst -
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