How are you viewing the deflationary forces at work?

[Spencer Gray]

Preface: I'm no economist but find discussing macro currents very interesting as they relate directly or indirectly to multifamily investing (investing in general). 

With a tight labor market, low interest rates ,QE and an economy deep into one of the largest expansions in history we still see very little signs of inflation. 

Technology and market disruptors are a major driving force of the deflation we've seen. A large percentage of the inflation in today's market actually comes from real estate and rising rents. Many operators are raising rents by at least 3% / yr with many trying to get 5%+ with value add strategies. Wage growth is finally around 3% after being stuck around 2% for the last decade but it's hardly on a tear. 

Until inflation (other than housing) picks up there will be resistance to raising rents in many (not all) markets.

Real estate in general is a massive and mature industry that has yet to see the kind of disruption that has occurred in many other industries. AirBnB,  Co-Working are definitely having an impact but is there a black swan out there not on our radar? 

As Jerome Powell testified before congress today it made me believe that at least the Fed believes that they can have as loose of a monetary policy as possible without causing significant inflation. The more important strategy from the Fed seems to be to keep the music playing as long as possible. 

How does all of this effect your near and long term strategy?