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Ep. 103: Your Neighbor Makes More than you Think; CPI Results- Inflation's Future; Multifamily's Hedge to Rising Inflation; How to Invest Based on the Stage of your Life
In this episode of "Kiss My Assets," Jamison Manwaring and Heather Andrews discuss the latest news on inflation and CPI numbers. They are joined by a special guest, Mitchell Drake, a broker at ABI Multifamily, who shares his insights on the multifamily market. The conversation revolves around the impact of inflation on various aspects of the economy and how it affects people at different income levels, especially those on fixed incomes. The CPI numbers, which indicate the consumer price index, came out and showed a slight increase, suggesting that the Federal Reserve may continue to raise interest rates to combat inflation. This increase in rates has implications for purchasing power, apartment values, and the real estate market as a whole.
Mitchell Drake explains that local banks and lenders have already factored in the increase in interest rates, and he doesn't anticipate significant price changes in the real estate market. However, he mentions that sellers' expectations might not align with buyers' offers, leading to some discrepancies. The hosts further discuss the impact of rising interest rates on the psyche of the market, considering the transition from lower rates six months ago to the current higher rates. They mention that good operators who can drive rents and find good deals can still thrive in the market, given the scarcity of housing and the demand for rentals.
The conversation also touches on the influence of Californians moving to Arizona, which has increased the incomes of residents in the area. The hosts mention that the incomes of newcomers from California are higher than the average income in Arizona, which has contributed to the local economy. They note that millennials, particularly wealthy millennials, play a significant role in this trend. The hosts and guest emphasize that the real estate market in Arizona, despite some seasonal fluctuations, remains strong due to the demand for rentals and the potential for further growth.
The episode concludes with a discussion about the positive outlook for the multifamily market, as indicated by a survey conducted by Berkadia, a large multifamily and commercial real estate agency. The survey shows that despite rising interest rates, the demand for multifamily properties is expected to remain strong, especially among millennials. This suggests that Mitchell Drake's expertise in the market will continue to be in demand, reassuring him about his employment prospects. Overall, the episode provides insights into inflation, interest rates, the multifamily market, and the impact of California migration on Arizona's economy.