Calm on the Surface, Distress Below: Joe Blackbourn on the State of Sunbelt Multifamily
The Eye of the Storm?
When my podcast guest this week, Joe Blackbourn, president and founder of Everest Holdings, stepped in front of a room of ULI members in late 2024, he titled his multifamily market forecast "An Underdressed Weatherman Gets Sent Into a Hurricane."
The image was evocative – and accurate. Multifamily investors, developers, and lenders had been navigating gale-force winds of rising rates, inflation shocks, and structural cost resets. And yet, as Blackbourn noted in my conversation with him, today the industry still appears eerily calm.
"There's a lot of stormy weather on the horizon, and, like a hurricane, we don't know quite where it's going to land or how bad it's going to be."
The Invisible Cost of 'Calm'
Core inflation may be retreating, but the real story, Blackbourn argues, is not about the rate of change. It's about the baseline shift.
"Even if we're at just over 2% now, it's still a 30% increase in a very short period of time," he said, referring to food prices, but with implications for housing as well. Home prices in many U.S. markets, particularly across the Sunbelt, have surged by 30–50% since 2020. That repricing is likely to stick.
"It's really difficult to give that pricing back," he added. "Short of some real economic calamity, the best we can manage is slower growth, not a decline in consumer pricing."
That same principle is locking up real estate deals. Rent growth has slowed, but operating expenses have not. The result is compressed margins, sluggish NOI, and a widespread inability to transact or refinance.
