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Multifamily market enters a more local, execution-focused phase
Rental housing performance, including rent declines and vacancy, has stayed relatively modest despite the largest supply wave since the 1970s.
Commercial Observer, in an interview carried through Berkadia’s “Inside the Deal, a CRE Podcast by Berkadia” format, said multifamily is moving beyond broad national narratives toward local conditions, operational discipline, and selective deal opportunities.
Rental housing economist Jay Parsons said apartment performance tends to hold up best when the broader economy is strong, household formation is healthy, and consumer confidence is rising. He described the current market as choppy and renter-favorable, but still notably durable, with national rent declines remaining relatively modest in aggregate and vacancy not deteriorating as severely as many expected.
The outlet also noted that even though valuations are down from peak levels, worst-case distress scenarios many predicted have not played out at scale. Parsons attributed part of the resilience to debt availability and recapitalization that have helped many owners stay afloat longer than expected, reducing the severity of any broader correction.
Commercial Observer added that deals are still getting done, but the environment is described as a “two steps forward, one step back” transition and recovery. Both Parsons and Berkadia executive Ernie Katai emphasized that rates still matter, while in 2026 the market is increasingly driven by local execution and asset specificity, with newer vintage properties in strong submarkets finding capital while older assets in weaker locations face a different outcome.