305: Prices Are Still Too High For Most Multifamily

Even though interest rates have risen dramatically over the past year, most apartment owners have not adjusted their expectations downwards when it comes to lowering the prices of their assets. This delta in the bid-ask of prices has contributed to a 50%-70% slow-down of transactions over the past several months. Lending standards have also gotten more onerous, so it’s making it more difficult to secure financing for buyers. Caleb Johnson, Founder of Red Sea Capital, has specialized in multifamily over the past few years and is continuing to source deals, but is starting to evaluate other asset classes where the prices are more favorable to achieving solid returns for his investors.