Real estate is cyclical. Typical cycles last 7-10 years.
We have both been in the real estate business 40+ years and have been thru 3 of these cycles.
In the late 1970’s we sold a lot of product at Cap rates of 9 to 10.
The market changed drastically in the early 1980’s driven by skyrocketing interest rates and prices did not rebound again until the early to mid 1990’s. (Lower interest rates)
We then ambled along at cap rates of 9-10 until the financial crisis of 2007. After the financial crisis Cap rates have fallen significantly and values have risen driven by historic low interest rates.
The next change we forsee is higher cap rates driven by higher interest rates which means lower values.
We don’t know exactly when this will occur but we are now nearly 10 years into the current cycle and it is almost certain that history will repeat itself.
If you are thinking of selling Multifamily or investment real estate in the next few years we would suggest that a strategy of sooner rather than later would make sense.
Give us a call or shoot us an email to discuss your situation.
Bob Wilkes 319-540-1178 , [email protected]
Mike Shaffer 319-360-6118, [email protected]