Finance & Economy

Housing market freeze with W&D Hall of Famer, Ivy Zelman

July 10, 2024

Housing market freeze with W&D Hall of Famer, Ivy Zelman

Ivy Zelman

Executive Vice President, Research & Securities

Ivy Zelman sees the drop in multifamily starts leading to a promising opportunity in late 2025 and 2026.

Housing market: Correction or crash?

Ivy Zelman is the executive vice president and co-founder of Zelman & Associates, a Walker & Dunlop company and the preeminent boutique research firm for the housing market. During a special episode of the Walker Webcast, Ivy and I spoke about everything housing-related, from the state of the housing market to where she sees the best opportunities right now.

The state of the housing market and affordability

Ivy believes the housing market is in a slow grind. While it isn’t exactly flying off the shelves anymore, inventory is still moving. However, it’s not as easy to move as it was just a few months ago. Builders are beginning to offer incentives for buyers, as affordability comes into question. Additionally, Ivy is beginning to see inventory levels for existing homes rise as the market begins to slow.  

The multifamily market is also beginning to slow, as fewer and fewer multifamily projects are being started. Ivy sees this drop in multifamily starts leading to a promising opportunity in the space in late 2025 and 2026, as newly-formed Gen Z households prompt an uptick in multifamily demand.

The multifamily outlook

Just a couple months ago, Ivy believed that we would see roughly one percent rental rate growth in 2024 and 2025. However, she just revised her estimates to be roughly two percent growth in both 2024 and 2025. There are some oversupplied markets where rental rates are declining as new supply continues to flood the markets, but there are still undersupplied markets out there, particularly in the Midwest and Northeast.

Where are the opportunities right now?

There are cost of capital headwinds no matter which investment sector you choose.  However, Ivy sees a lot of opportunity in the rental market, specifically in the build-for-rent (BFR) segment. Although it can be tough to make the numbers work, she believes it’s a very lucrative market, whether you’re building single-family rentals or multifamily rentals. Ivy believes cash flowing rental properties are the place to be, and although overall demand for rentals has slowed a bit, the market will continue to grow over the long term.

Want more?

Some of the brightest people in their respective fields, such as Ivy, are guests on the Walker Webcast. To see the list of upcoming guests, subscribe to the Walker Webcast!

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