Aaron Abelson, senior vice president for the Midwest region of Alliant Capital, sees the same thing we all do when he looks at the nation’s housing market: Housing values are falling. Foreclosures are far too high. And a growing number of underwater homeowners are walking away from their mortgages.
To Abelson this means that the country’s multi-family renting market will remain strong for some time. After all, when single-family housing struggles, multi-family tends to rise.
“As people lose homes to foreclosure, they ultimately have to live somewhere,” Abelson said, speaking from his office in Chicago. “Housing is a critical element to our economy. As people have gotten out of the ownership market, they’ve gone back to the rental market. That has been the dramatic driving factor that has caused this healthy, robust success of the multi-family market.”
Like most multi-family lenders across the country, Alliant is seeing steady business today. Abelson refers to himself as being extremely cautiously optimistic about the sector. That may seem like a lukewarm endorsement of the multi-family market. But in today’s commercial real estate market, which most professionals agree is the worst they’ve seen in their careers, “cautiously optimistic” ranks as high praise.
Abelson has seen multi-family stabilize during the last five years. He’s seeing a consistent increase in overall occupancies for properties that benefit from solid locations. He’s seeing landlords successfully raising rents without losing their tenants.
Obtaining financing has become less of a burden, too, Abelson said. He’s even seeing a small amount of new construction in this sector.
And as the nation’s housing market continues its slump, Abelson says he doesn’t see these positive multi-family trends changing anytime soon.
“The housing market, unfortunately, still lags behind,” Abelson said. “And unfortunately, from everything that you read and hear, the housing market still seems to be a fairly predominant problem in our overall economy. Until we see the bottom of the housing market and until we see housing values start to rise again, we will continue to see a healthy, robust multi-family rental market.”
