Something interesting is happening in the market right now.
Inflation is finally slowing down — April’s CPI came in at 2.3% year-over-year — but housing costs are still rising faster than almost everything else.
That tells us a few important things:
1. Demand for shelter isn’t going anywhere.
2. Rents are still climbing.
3. Multifamily remains one of the most resilient places to park capital.
Let’s break it down.
Housing Costs Are Still Rising
Even as energy, food, and goods come down in price, housing is still inflating at over 5% annually. That’s not a bug — it’s a feature of the market right now. There’s simply not enough housing to meet demand, and many people are getting priced out of buying a home altogether.
That leaves multifamily operators in a strong position. Leases reset every year (or sooner), so you can respond to market rents quickly. You don’t have to guess what inflation will do next — you’re already seeing it in your collections.
The Affordability Crunch
Let’s face it — homeownership is out of reach for a lot of people. High mortgage rates, lack of supply, and expensive insurance are keeping buyers on the sidelines. For many, renting isn’t just a preference — it’s the only option.
That means the rental pool is growing, and well-located multifamily properties are absorbing that demand.
We’re also seeing generational shifts play out:
• Millennials are settling into long-term renting.
• Gen Z is entering the housing market with limited buying power.
• Retirees are downsizing and renting for flexibility.
All of this creates sustained tailwinds for multifamily, especially in markets with strong job growth and limited new supply.
You Still Get the Best Tax Treatment in the Game
Multifamily real estate continues to offer powerful tax benefits that most investors overlook until they actually experience them:
• Depreciation shields your income.
• Cost segregation can accelerate your write-offs.
• 1031 exchanges let you defer capital gains and reposition into stronger-performing assets.
For high-income investors looking for yield without getting crushed by taxes, this is hard to beat.
Pricing Dislocation = Entry Point
Here’s where it gets really interesting.
Sellers are still hoping for 2021 prices. Buyers are underwriting deals based on today’s debt and cash flow realities. That gap has created pricing friction — and opportunity.
If you’re a long-term investor with dry powder, this is a rare window where:
• Assets are trading at a discount to replacement cost.
• Cap rates may compress again as interest rates fall.
• You can buy high-quality deals without competing against the same flood of capital we saw two years ago.
Final Thought
Markets move in cycles. But people always need a place to live.
If you’re looking for an investment that offers steady income, inflation alignment, tax advantages, and long-term upside — multifamily deserves your attention right now.
At CCG, we help investors think a few moves ahead. Whether you’re selling an asset, planning a 1031 exchange, or repositioning your portfolio for what’s next — we’re here to advise, not just broker.
Let’s talk strategy.
