REAL ESTATE CYCLE UPDATE
SPREADS CONTINUE TO MAINTAIN THOUGH 10 YEAR IS AT 2.32%
The chart above is the Mueller Market Cycle, which as indicated is on a national level. You will see the apartment market is leading the charge and is at the peak of the cycle. Locations are paramount as well as local demographics, which may not represent the national demographics. Typically, what lies ahead in cycles that are in ‘Hyper Supply” are flat rent growth, higher vacancies and new construction coming on line. This precedes a recession. Specific markets for apartments in Hyper Supply located in the southeast are Nashville, Tampa and Charlotte.
Back to spreads, they are still fairly consistent and even at tight levels. Spreads are much tighter than say 6 months ago, but unfortunately the 10 Year is up approximately 50 basis points since the election. There are many reasons these rates will reverse themselves, but only time will tell if those reasons pan out.
HAPPY THANKSGIVING TO ALL! HAVE A BLESSED DAY!!