Neal Bawa warns that 2025‑2026 will be a muddle year for multifamily as the final wave of new supply overwhelms demand, pushing concessions to over a third of units and flattening rent growth. Cap rates have already fallen about 30% from their 2023 peaks, leaving transaction prices well below historic highs. Bawa projects modest 1‑1.5% rent growth in 2026, rising to roughly 3% in 2027 once concessions burn off and supply eases. The environment favors buyers who can tolerate short‑term flat returns for long‑term upside.
Neal Bawa characterizes 2026 as a “muddle year” for multifamily, with rent growth flatlining and concessions climbing above one‑third of units. A three‑year supply binge left roughly 25% of new deliveries unabsorbed, pressuring especially Class A assets. Capital remains abundant, yet...