From California to Maui, the frequency and scope of wildfire events are rising, causing insurance markets and public agencies to reevaluate property in areas at risk for catastrophic damage. As a result, rental housing providers are seeing greater limitations to coverage, higher premium prices, and, in some cases, a total absence of viable private insurance — a trend detailed in the NMHC 2023 State of Multifamily Risk Survey and Report. This troubling new trend has placed many rental housing operators in a bind where they must simultaneously contend with the declining availability and affordability of insurance options.
Small Balance Market Resiliency Comes into Focus to Start 2019
Ever since the Federal Reserve increased short-term interest rates in the waning days of 2018, the conversation has shifted from when will rates rise again to will the Fed have to lower rates?
Markets currently peg the probability of at least one rate cut in 2019 at about even odds. However, this does not mean a downturn is imminent. By several measures, the economy is performing at its highest capacity of any point since before the financial crisis.
Whether a period of economic weakness is years away or just around the corner, the small balance multifamily sector is projected to remain healthy.
For more on the small balance multifamily sector, read Arbor Chatter’s “Q1 2019 Small Balance Multifamily Investment Trends Report.”
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- Lending Volume
- Cap Rates & Spreads
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