November 30, 2023

By: Ben Nelson, Investor Relations Regional Manager

The real estate election effect

Elections usually bring economic uncertainty, and navigating the real estate market during an election period is no exception. Presidential elections can precipitate regulatory changes that affect all industries, and the 2024 election is already bringing up questions about how the election will impact the multifamily market.

While this time brings greater unpredictability, it’s reassuring that these questions arise every election year. Let’s go deeper and learn more about commercial real estate, and more specifically the multifamily market during election periods. 

Past real estate trends and expectations for 2024 

The past several decades have proven that real estate values drop during election years because consumer and investor uncertainty rises with the unknown changes on the horizon. 

As we approach 2024 the current high mortgage rates and global economy will likely be top of mind. According to the National Association of Realtors (NAR), “The real estate market is facing a turbulent economy and sagging office sector, exacerbated by inflation, slowing GDP growth, high interest rates, bank stress, and rising geopolitical concerns involving Russia, China and elsewhere.” 

The NAR also reports nationwide housing shortages and a growing need for affordable housing: “The U.S. continues to face severe housing shortages. Access to affordable housing has huge implications for real estate investors, economic growth, healthy communities and the need for people to live somewhere.” 


How the election impacts the economy and commercial real estate 

Commercial real estate is an especially resilient asset class, which is evident from historical markets.  

The multifamily segment of commercial real estate has weathered many recent economic storms, such as the dot-com crash in 2000–2001, the Great Recession of 2008–2010, and the COVID-19 pandemic recession in 2020. Coldwell Banker Richard Ellis (CBRE) research shows that class B apartment rents fell only by $125 per month during the 2008 recession because many Americans needed affordable housing, and they had a quick recovery.

“Once rents bottomed out, the rent decline was short-lived. It took less than two years to get back to prerecession rent pricing levels,” says Ashcroft Capital’s Director of Investor Education Travis Watts. 


Inflation comes with obvious downsides, such as higher costs of everyday essentials and the tightening of consumer spending. However, multifamily housing tends to fare well during periods of inflation. Inflation causes the price of construction materials to rise, making single-family homes more expensive and creating a higher demand for apartment living. 

Interest rates 

The Federal Open Market Committee (FOMC) anticipates rates softening at the beginning of 2024.

The National Association for Industrial and Office Parks states, “Recent recessions have shown multifamily to be uniquely resilient to macroeconomic volatility. It has historically been the best-performing property type during recessions, with demand remaining relatively strong and rents recovering faster than other property types.” 

Job market 

The year 2023 saw job growth remain robust and housing demand remain consistent, resulting in a healthy apartment demand and rent growth.

The NAR reports, “Younger generations are choosing their lifestyle first and their job second—a reversal from previous generations. Also, young professionals are showing a preference for entrepreneurship and remote or contract work.”

These factors are pushing the age of the average first-time homebuyer higher. 

Public perception 

During an election period consumer stress and anxiety levels often increase. A new president’s proposed policies can impact finances, causing many investors to pause commercial property investment until new policies have been forecasted.  


Multifamily investing in an election year 

Cost to rent vs. cost to own 

Throughout 2023 renting has proven more cost-effective than owning, lowering the monthly financial burden for millions. In times of economic uncertainty, leasing is an attractive option for many because of elevated housing prices and prohibitive mortgage rates. Further, renters enjoy avoiding some of the downfalls of home ownership, such as paying real estate taxes, maintenance costs, insurance costs, and the list goes on.  

Rental growth 

While multifamily rents are expected to grow modestly compared to their post-pandemic ascension, renting should remain far more cost-effective than owning for the foreseeable future. Yardi Matrix reports that US job growth remains robust, and housing demand is steady. Combined with a rising population, these factors should result in steady apartment demand and progressive rent growth. 


Assisting Investors to Safeguard Against Inflation

At Ashcroft, our proven strategies have helped our investors hedge against inflation through programs such as our purchase order program to help control property and maintenance expenses. With our in-house property management and construction teams, we can control the costs, quality, and speed of completion for our value-add property initiatives. Buying directly from the manufacturers also allows us to reduce costs, ultimately hedging inflation. 

Effective budget management 

Despite inflationary pressure, we remain committed to maintaining stability in construction and renovation expenses. Our underwriting team adopts a conservative approach to anticipating these costs, affording us flexibility for any potential growth within our budget constraints.

Our proactive measures in cost management enable us to deliver competitive returns. Through our proven strategy, we can keep apartment unit renovations at approximately 30–35% below wholesale pricing. This translates into a substantial value-add advantage that we extend to our investors. 


Ashcroft Can Help You Invest in Multifamily Real Estate During an Election Year 

As a multifamily investment company, our industry knowledge offers long-term benefits to our investors. We offer our investors a comprehensive investment process, funding expertise, historical industry knowledge, and understanding of navigating different market cycles.

Our multifamily investing strategy is focused on making the right deals at the right time with conservative underwriting to protect our investors’ commercial investment capital and allow for future growth. This proven strategy benefits our investors long-term and helps minimize risk. 

We remain committed to maintaining open communication and transparency with our current and new investors during election and nonelection periods.