The result of the widening bid-ask gap is nothing short of standoff, Campo added: “The result is the current standoff that won’t be resolved until buyers and sellers adjust their views on valuation and meet somewhere in the middle,” he said. “Until then, we wait patiently.”
Campo said he and the REIT’s executive chairman and president, Keith Oden, have spent a considerable time “…debating the merits of waiting patiently versus making something happen now.” The name of the company is derived from the last names of both Campo and Oden, the founders of the REIT.
Macro changes come after banner years
Despite the changing macro market, the company has performed well given the lure of multifamily investment as the single-family sector cools, it was stated. “We exceeded the top end of our guidance and raised guidance every quarter,” Campo said. “Operating conditions over the last two years have never been better, driven by being in the right markets with the best product and having the best teams.”
He detailed reasons for the high demand: “Apartment demand was driven by an acceleration of in-migration to our markets that opened sooner after the pandemic and continue to be more business-friendly, driving outsized job opportunities. And a massive release of rental demand from people who were previously at home with their parents are doubled up as government stimulus added to their savings and subsequent buying power.”
The scenario took its toll on demand: “As a result, apartment supply could not keep up with increased demand,” Campo explained. “2023 will be a return to a more normal housing demand market. Consumers still have excess savings, and the job market remains strong. Despite rising rents, apartments remain more affordable than purchasing homes for many consumers in our markets given the rise in home prices and interest rates.”