Does this seem "bubbly" to you?

[Marc C.]

How ya feeling about the 2017 national multifamily market in view of the facts: Toppy stock market that people fear, stagnant personal incomes in many areas, 80% LTV's, rent growth rates slowing, new construction financing difficult to get, many markets overbuilt, historically low cap rates even after interest rates are up .75% since Nov. 1, multiple offers on listed deals requiring you to put down "hard" earnest money, 120+ real estate crowdfunding sites, TONS of multifamily newbies getting into their first deals, TONS of sponsors promoting multifamily deals, TONS of multifamily training courses, TONS of multifamily blogs and podcasts, several new books on apartment investing, aggressive sponsors who predict 5% rent growth and 20% IRR's because their exit cap rate is the same or lower than they are buying it at (not realistic in a period of rising rates), and I'm sure I've missed some stuff.

If you're a broker, you're telling everyone, "Sure, this will continue!" and you have numerous reasons...location, job growth, apartment performance since 2014. "It can't happen here: The vacancy rates are low, rents are climbing, folks can't get mortgages, new employers just announced x000 new jobs." I've heard this all before...in fact, I used to tell buyers the same story. And the trend did continue, until it didn't. 

Is it all too good to be true? 

Just remember: Rents DO go down in a recession. Cap rates DO go up. The Law of Averages is a LAW! It's a good time to be conservative in your projections. 

Of course, all real estate is local, and there are deals in every market. You just have to find them (and they sure as heck aren't listed in the MLS!)