Multifamily

We can expect to see a combination of new and familiar trends in the Milwaukee apartment sector in 2016 that will continue to attract investors to the local apartment market. What makes the start of 2016 different from 2015 is progress toward the normalization of monetary policy. In December, the Federal Reserve Board decided to raise the federal funds rate by a quarter percentage point, the first such increase in nearly a decade. The Federal Reserve Board’s widening may have an impact on the short-term rates, but the long-term interest rates that impact real estate values the most are influenced by the yields on the long-term U.S. Treasury bonds. We expect the long-term interest rates to stay low for the foreseeable future. When there is high demand for the Treasury bonds, the price of the bonds increase and the yields decrease, keeping long-term lending rates low. The two factors responsible for driving rates down in early 2016 are the high levels of volatility in stock markets around the globe and the drastic drop in oil prices. The volatility in the stock markets drives global capital to flow into the safe haven of bonds, and specifically the U.S. Treasury bonds, as …