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The Next Housing Crisis on the Horizon

Vacant construction lot

While concerns about occupancy and rent growth have been the story so far in 2024, a new narrative is in sight. Yes, some submarkets are experiencing oversupply as new apartment communities come online and begin to lease up.  However, with building permits and housing starts grinding to a halt, the future looks very bright for multifamily housing late in 2024 and beyond.

In short, due to inflated costs of labor and materials, new developments are stalling. Many projects are being frozen or terminated. Prohibitive finance costs are restraining new construction that was once booming when interest rates were low.

Paused and cancelled multifamily and single-family developments may not be felt immediately, but come late 2024, the housing crisis spurred by frozen construction during the Great Recession of 2008 will feel very real again. We are still several million housing units short from the Great Recession and will not catch up in the current housing cycle. This is very good news for owners of housing properties. We see an opportunity for existing and new investors to benefit from the next upswing in the housing market.

Headlines are beginning to tell this reframed story:

Capital Square’s Response to the Headlines:

We’re ready for it. We know where opportunity resides, and it’s in housing. Multifamily, build-for rent (single-family) and manufactured housing communities answer both basic needs and lifestyle aspirations. They will remain solutions for those who cannot afford to buy a home or those who rent by choice for the benefits and flexibility a rental lifestyle can provide.

Investing in housing – whether through Delaware statutory trusts (DSTs), opportunity zone funds, development funds or a real estate investment trust – enables a qualified investor to seize the potential of this exceptional asset class. This isn’t a new belief or new means of doing business. Tax-advantaged real estate investment strategies are at the core of everything Capital Square has been, is now, or will become.

Our development team is also showcasing its distinction in the present environment. There are no pauses on Capital Square Development’s horizon. By seizing upon strategic pathways and innovative processes, Capital Square’s multifamily deliveries remain on schedule for 2025, 2026, and 2027 in metros including Raleigh, North Carolina; Knoxville, Tennessee; Phoenix, Arizona; and Richmond, Virginia.

Housing is a necessity. People need a place to live. The economy may shift and sway, and the real estate industry may have its fluctuations. Nonetheless, an investment in multifamily properties would have never lost money when made in any quarter since Q4 1977 in the National Council of Real Estate Investment Fiduciaries (NCREIF) unlevered property portfolio. In fact, the average annualized return was 9.4%.1

At Capital Square, we raise capital, buildings and expectations. The complexities of the real estate market are manifold, but we believe the best is yet to come.

Contact Capital Square to learn more.


  1. “The Golden Age of Multifamily,” Linneman Associates, LLC, 2022 (the “Linneman Report”). Linneman Associates, LLC is a consulting and research firm specializing in commercial real estate investment strategy and was compensated by Capital Square Realty Advisors, LLC for preparation of the Linneman Report. ↩︎
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