Jay Parsons on Multifamily Recovery, Market Selection & The 2027 Opportunity
June 25, 2026
The multifamily sector is finally moving beyond its historic supply wave but recovery won't look like the boom years investors remember. In this episode of REdirect, Jonathan Spitz sits down with rental housing economist Jay Parsons to explore where multifamily stands today, why supply is no longer the primary story, and how investors can position for the next phase of the cycle by focusing on fundamentals, market selection, and long-term conviction.
What if the multifamily market's recovery is already underway but most investors are still looking in the wrong places?
In this episode of REdirect, Jonathan Spitz welcomes Jay Parsons, one of the most respected voices in rental housing economics, to break down the realities of today's apartment market and why the industry's long-awaited recovery will look very different from past cycles.
Drawing on years of advising REITs, operators, lenders, and institutional investors, Jay explains how the sector survived one of the largest supply waves in modern history and why the conversation is now shifting from construction deliveries to demand fundamentals. With new supply projected to fall sharply over the next two years, investors are beginning to focus on where rent growth, occupancy, and long-term value creation will emerge.
The discussion explores why submarket selection has become more important than choosing the right metro area, how tier-two markets are quietly outperforming many high-growth cities, and why investors must rethink valuation expectations in an environment where cap rates remain stubbornly compressed.
Jay also dives into regulatory risks, the disconnect between public and private market pricing, and why the most compelling opportunities may require patience rather than aggressive short-term return expectations.
Whether you're an apartment owner, allocator, REIT investor, or real estate operator, this conversation provides a practical framework for navigating the next stage of the multifamily cycle and understanding why 2027 may ultimately be the year investors have been waiting for.
What You'll Learn:
Why "survive until 2025" became "survive through 2025"
The industry underestimated how long the supply wave would last. Even in 2025, apartment deliveries remained among the highest levels seen in decades, forcing operators to reset expectations around rent growth and occupancy.
The industry underestimated how long the supply wave would last. Even in 2025, apartment deliveries remained among the highest levels seen in decades, forcing operators to reset expectations around rent growth and occupancy.
Why demand is now the key variable
With new deliveries projected to decline dramatically, future performance will depend less on construction activity and more on job growth, household formation, and renter demand.
The "flight to quality within markets" framework
Success today is increasingly driven by submarket selection rather than broad metro-level bets. High-quality locations with strong amenities, infrastructure, and diverse employment bases are outperforming weaker pockets within the same city.
Success today is increasingly driven by submarket selection rather than broad metro-level bets. High-quality locations with strong amenities, infrastructure, and diverse employment bases are outperforming weaker pockets within the same city.
Why tier-two markets are gaining investor attention
Markets like Grand Rapids, Indianapolis, and Greenville have avoided the extreme supply pressures seen in many Sun Belt metros while benefiting from steady population growth and diversified economies.
Markets like Grand Rapids, Indianapolis, and Greenville have avoided the extreme supply pressures seen in many Sun Belt metros while benefiting from steady population growth and diversified economies.
How to invest in a tight-cap-rate environment
Cap rates have not adjusted as much as interest rates, forcing investors to focus on long-term income growth, durable fundamentals, and extended hold periods rather than quick exits.
Cap rates have not adjusted as much as interest rates, forcing investors to focus on long-term income growth, durable fundamentals, and extended hold periods rather than quick exits.
The regulatory risks investors may be underestimating
From rent control initiatives to tenant screening restrictions, housing regulations continue to expand. Understanding policy risk is becoming an increasingly important part of underwriting.
From rent control initiatives to tenant screening restrictions, housing regulations continue to expand. Understanding policy risk is becoming an increasingly important part of underwriting.
Why multifamily REITs may be sending a market signal
Public apartment REITs continue trading at meaningful discounts to underlying asset values, creating an arbitrage opportunity that private capital is increasingly exploiting through take-private transactions.
Public apartment REITs continue trading at meaningful discounts to underlying asset values, creating an arbitrage opportunity that private capital is increasingly exploiting through take-private transactions.
Why 2027 could be the real inflection point
As the supply wave fully works through the system and occupancy normalizes, rent growth could accelerate beyond historical averages, creating a much stronger backdrop for apartment fundamentals.
Episode Chapters:
As the supply wave fully works through the system and occupancy normalizes, rent growth could accelerate beyond historical averages, creating a much stronger backdrop for apartment fundamentals.
Episode Chapters:
[00:00:00] Intro
[00:03:38] Why “Survive Till ’25” Took Longer Than Expected
[00:06:49] Supply Slowdown And The New Demand Story
[00:10:11] AI, Hiring Uncertainty, And Economic Resilience
[00:13:28] Sun Belt Vs. Midwest: The New Multifamily Divide
[00:19:10] Valuations, Cap Rates, And Long-Term Investment Strategy
[00:25:25] Distress, Regulation, And Risks Investors Are Watching
[00:37:18] Lessons From The 1970s And What Comes Next For Multifamily
About the Guest:
Jay Parsons is a rental housing economist, advisor, and one of the most widely followed voices in multifamily real estate. He advises institutional investors, REITs, operators, lenders, and housing organizations on market trends and strategy. Formerly Chief Economist at RealPage, Jay is currently Economics Advisor to JPI and Strategy Advisor to Madera Residential. He also hosts The Rent Roll with Jay Parsons, one of the industry's most popular housing podcasts, and has been featured by The Wall Street Journal, Bloomberg, CNBC, The New York Times, and numerous leading real estate publications.
Quotes:
- "Supply is the easiest thing to forecast because it's based on things already permitted and started, whereas demand and rents obviously have uncertainty around them."
- "I think the real story for the next cycle is less about the market and more about the location and the deal within that market."
- "You want to find places that have year-round drivers to them and aren't just dependent on one thing like a tourism-type thing."
- "There is going to be more distress that hits the market, but it's not going to be systemic and it's generally probably going to be less desirable real estate."
- "What you're going to see is that the highest quality distress is getting resolved behind the scenes through recaps and loan extensions because everyone's bullish on the outlook."
Episode Resources:
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