The real estate headlines lately have been filled with fear and uncertainty—rising interest rates, slowing rent growth, and news of new apartment deliveries flooding the market. But as is often the case, the headlines don’t tell the whole story.
In a recent episode of Ritter on Real Estate, I had the opportunity to sit down with my mentor and friend, Joe Fairless, co-founder of Ashcroft Capital and host of the Best Ever Real Estate Investing Advice Show. With more than $2.8 billion in assets under management and over 120 passive deals under his belt, Joe has a unique vantage point on where the market is headed.
What emerged from our conversation is clear: today represents one of the best multifamily buying opportunities in more than a decade. Here’s why.
Supply is Peaking, But Demand is Holding Strong
Right now, we’re seeing a historic wave of new apartments hitting the market. In just the first half of this year, over 284,000 units were completed nationwide—more than the average number of units completed in a full year over the last 23 years.
At first glance, that sounds like bad news for investors. More supply should mean lower rents, right? Surprisingly, that’s not the case. Despite the surge in completions, occupancy has remained steady at 94.2% nationally for three straight months.
The reason? Demand for housing in the US is simply too strong. Household formation continues to outpace new supply, and we’re still digging out of the shortage created when almost no new apartments were built during the Great Recession.
“I remember thinking, why is life this difficult for us? We’re good people, yet we’re stuck in this rent rat race,” Franco recalls.
His experience fueled a lifelong pursuit to break that cycle for others. After a stint as a real estate agent—where he disliked turning away families who couldn’t afford traditional homes—Franco discovered an overlooked opportunity: mobile homes.
The Cliff Ahead: Why Supply is About to Plummet
While today’s headlines focus on the flood of completions, what most people miss is that new construction starts have collapsed. Developers can’t make projects pencil with higher interest rates, expensive materials, and regulatory hurdles.
In fact, we’ve already seen the largest year-over-year swing between completions and starts since the 1970s—a nearly 60,000-unit deficit. That means by mid-to-late 2025, the pipeline of new apartments will dry up.
When you combine falling supply with steady (or even increasing) demand, the result is simple economics: rents and property values will rise.
A Rare Buying Window
Here’s where things get interesting. For the first time since 2010, we’re seeing asset prices decline as higher interest rates have pushed cap rates up. That means investors today can acquire properties at better values than we’ve seen in over a decade.
As Joe pointed out, this opportunity doesn’t even depend on interest rates dropping. Even if rates remain elevated, the impending supply shortage will drive rents upward. If rates do come down—which the Fed is already hinting at—the combination of lower financing costs and stronger rental demand could create explosive appreciation.
Legendary investor Howard Marks recently called commercial real estate—and multifamily in particular—a “once-in-a-generation buying opportunity.” Joe and I agree.
What Passive Investors Should Look For
If you’re a passive investor considering deals in this environment, the macro picture looks promising. But as Joe emphasized, success often comes down to operations.
Here are a few of his key lessons from investing in 120+ passive deals:
– Focus on Owner-Operators
Invest with sponsors who have direct control over operations, not just capital raisers with no decision-making power.
– Dig Into NOI Growth
Don’t just look at IRR or projected returns—ask where the growth is coming from. Was it true operational improvements, or just market-driven cap rate compression?
– Ask About Track Record
How many returning investors does the sponsor have? Can they show you real financials from past projects?
– Look for Accountability
Every operator has faced challenges. The best ones own their mistakes, share what they’ve learned, and adjust for the future.
The Bottom Line
We are entering a unique 12-month window where multifamily assets can be purchased at discounted prices—just before the supply-demand imbalance swings dramatically in favor of owners. By 2025 and beyond, the narrative will likely shift from “too much supply” to “not nearly enough housing.”
For investors, that means now is the time to get educated, get comfortable with strong operators, and position yourself for the wave that’s coming.
As Joe put it: “When supply dries up and demand soars, you’re going to want to be an owner or a passive investor in multifamily.”