Podcast Summary: The Rent Roll with Jay Parsons
Episode 55 – Alyson Bode | Q4 '25 Apartment Market Update & Outlook
October 16, 2025
Overview
In this episode, host Jay Parsons provides a deep dive into the state of the U.S. multifamily (apartment) market as of Q4 2025, analyzing recent data, current challenges, and the outlook for the sector. Parsons frames 2025 as a distinctly renter-friendly year—counter to operator and developer expectations—with demand holding strong but rent growth unexpectedly weak. Key drivers of this environment, such as historic supply peaks and nuanced demand signals, are explored in his solo analysis and in a wide-ranging interview with Alyson Bode, SVP of Research & Data Strategy at Kettler.
Main Discussion Points & Insights
1. The Renter’s Market: Expectations vs. Reality
- 2025 has remained a renter's market for longer (and more severely) than anticipated. Even industry veterans (including Parsons) expected at least modest rent growth by now.
- Key Theme: “Uncertainty.” Both data and operator sentiment are sending mixed signals, a theme echoed in sector earnings calls and day-to-day operations.
(04:05)
2. Mixed Signals: Strong Demand, Weak Rents
- Headline Stat: Rents for new leases fell 0.28% in Q3—“the first time we’ve seen a Q3 rent cut since 2009.” (05:00)
- Year-over-year rent change now negative for the first time since the COVID era (down 0.3% per RealPage).
- Parsons dismisses comparisons between 2025 and the GFC/2009 as “a dumb comparison.” Key differences:
- Supply: 415,000 units in 2025 vs. 184,000 in 2009
- Absorption: +500-600k units in 2025 vs. -70k in 2009
- Unemployment: 4.3% in 2025 vs. 9.8% in 2009
"2025 is not 2009, nor does it rhyme with 2009. Today's challenges appear to be far more related to high supply."
— Jay Parsons (06:43)
3. Geographic Variation: Where Are Rents Falling or Growing?
(08:00)
- Falling: Denver (-8% YoY), Austin (-7%), Phoenix and Colorado Springs (-5%), Southwest Florida (high supply markets).
- Denver’s unique: delivery timing concentrated in winter → historic lease-up wave spilling into 2025.
- Rising: San Francisco (+7.5%), Providence, New York, Chicago, San Jose, Pittsburgh (low supply markets).
- Even low-supply markets like Boston now see flat rent growth, possibly due to reduced international student demand.
4. Occupancy and Absorption: Why the Disconnect?
- Vacancy rates are higher (6.5% in CoStar), but the biggest spike happened 2022-24.
- Q3 absorption: 129,000 (CoStar), about 50% above historic median Q3s.
- Even with weak rent growth, net absorption is historically strong—units are getting filled, just spread over many new options.
- Operators feel the disconnect between data showing “strong demand” and tough day-to-day leasing—explained by the supply surge filtering demand across more properties.
(14:57)
"There's a lot of demand out there in terms of renter household formation. But there's even more supply."
— Jay Parsons (15:04)
5. Current Challenges for Operators
- Leasing remains tough despite healthy absorption: More units = slower leasing, more concessions, tougher conversions.
- Operators are prioritizing occupancy over rent, leading to higher renewal rates but muted rent increases.
6. Looking Forward: The Road Ahead
(20:00)
- Seasonal slowdown: Expect little market clarity until spring (March-April 2026).
- Absorption likely to slow as new supply wanes—a function of fewer completions, not necessarily demand weakness.
- Silver lining: Wage growth keeps outpacing rent growth (up 4.1% YoY per Atlanta Fed), lowering rent-to-income ratios (now under 22% for new leases for the first time since 2019).
- Renewals: Retention at record highs (56% in Q3), with average renewal rent hikes at 3.6%.
- Main risk: If “new lease” rents fall below renewal rents, property managers may lose pricing power on renewals.
7. Policy and News Highlights
(22:00–32:00)
- Population/housing ratio not meaningful for rent or affordability trends.
- Leasing fraud is increasingly sophisticated, adding cost and friction to the market.
- Regulatory battles: Texas suburbs find creative ways to restrict multifamily builds despite new state law (e.g., requiring 8-story buildings with excessive amenities or rezoning to allow “heavy industrial” use).
- California moves in the opposite direction, passing laws overriding local zoning near transit to allow more multifamily development.
Interview with Alyson Bode (SVP, Kettler): Market Outlook and Strategy
(Interview starts at 32:55)
Alyson’s 2025 Review and Surprises
- 2025 word cloud: “Uncertainty.” Entered the year cautious, expecting uncertainty, but was surprised by the persistence of strong demand even amid clear rent softness.
- Surprises: Demand “equally as good” as past years, but “Q3 data just kind of dropped... things are slowing down a little bit.”
- Downside: Lack of interest rate cuts was a drag; surprised by the first Q3 rent cut since 2009.
When Do Rents Recover and Concessions Burn Off?
(39:21)
- Likely “closer to summer [2026]” than spring—depends heavily on submarket specifics and how fast concessions burn off as supply lease-ups mature.
- “Concessions… get really sticky really quick. It’s hard to get out of that.”
Market-Level Reflections: Which High Supply Markets Will Rebound First?
(41:33)
- Favors “high-supply but high-demand” markets, especially Raleigh and Charlotte.
- Raleigh: resilient, strong job growth and absorption.
- Charlotte: similar, but with a strong finance sector.
- Austin: “Potential for economic growth…stronger than people give it credit for.”
- Laggards: Dallas (“struggling a bit”), Phoenix (later supply wave).
"Supply is maybe not fleeting, but it's not nearly as dire as people expect it to be."
— Alyson Bode (41:53)
Submarket Nuances in the Carolinas
(45:54–50:13)
- Raleigh: Tech- and education-driven, more suburban family growth, biotech and pharma sectors.
- Charlotte: Finance hub, younger professional base, regionally diversified employment.
- Charleston and Greenville: South Carolina markets with consistent cachet and responsiveness to little supply shifts.
Scenarios for Rent Rebound and Downside Risks
Upside:
- Submarket-level dynamics—low supply plus strong demand (e.g., resilient job and demographic growth)—could produce “outsized rent growth.”
- Macro upside scenario: Economic recovery and lower new supply allow rents to surge in select markets.
Downside:
- Prolonged macroeconomic headwinds (unemployment, weak sentiment, inflation) could extend rent softness and slow recovery beyond 2026.
- Lower-income renter segment is increasingly vulnerable to inflation and falling services wages.
“Sentiment is already kind of an indicator here…if we keep being depressed like we are, then we’re going to have lower absorption.”
— Alyson Bode (55:00)
Development Outlook: When Do New Starts Ramp Up Again?
(62:35–69:25)
- Kettler and peers are “ready to go” but deals are “right on the edge” due to pro forma sensitivity (interest rates, insurance, operating costs).
- Construction and labor costs remain a concern, but large developers are better placed to absorb and manage.
- Tariffs and materials: No significant cost impacts yet; potential labor shortages could be more impactful in the next cycle.
- Philosophy: “Now is the time to get going” on development—supply peaks are fleeting, and those who start now will deliver into a more favorable environment.
Capital Markets: Barriers for Smaller Developers
- Small/local groups (doing 1–2 projects/year, 75–80% of all starts) will face challenges in raising capital, amplifying the supply drop-off.
“The two hardest things in real estate are timing and scale… now is the time to get going.”
— Alyson Bode (69:25)
Notable Quotes and Memorable Moments
- Jay Parsons (06:43): “2025 is not 2009, nor does it rhyme with 2009. Today's challenges appear to be far more related to high supply.”
- Jay Parsons (15:04): “There’s a lot of demand out there in terms of renter household formation. But there’s even more supply.”
- Alyson Bode (41:53): “Supply is maybe not fleeting, but it's not nearly as dire as people expect it to be.”
- Alyson Bode (69:25): “The two hardest things in real estate are timing and scale… now is the time to get going.”
- Jay Parsons (57:04): "In 2009, we had 10% unemployment. Right now, we’re closer to 4%... Are we seeing the start of a real slowdown or just widespread gloom?"
Timestamps for Key Segments
- 04:05: State of the multifamily market—2025 as a renter’s market, uncertainty theme.
- 05:00: Q3 rent decline analysis and why 2025 ≠ 2009.
- 08:00: Market-level breakdown: rents up vs. down, impact of local supply.
- 14:57: Explaining the demand/absorption disconnect.
- 20:00: What lies ahead: slow leasing season, absorption and wage growth context.
- 22:00–32:00: News & policy headlines—regulation, development, and fraud.
- 32:55: Start of Alyson Bode interview.
- 39:21: Timing rent recovery and burning off concessions.
- 41:33: Market focus—high supply winners/laggards.
- 45:54: The nuanced differences between Raleigh and Charlotte.
- 54:56: Downside risks and macro factors.
- 62:35: Development pipeline, capital markets, construction cost discussion.
- 69:25: Why now is the time to build; challenges for smaller operators.
Tone & Style
The episode matches Jay Parsons' signature accessible, data-savvy, and candid style. Both he and Alyson Bode approach complex market dynamics with a pragmatic, slightly optimistic tone—rooted in data but conscious of very real operational and macroeconomic headwinds. Humor and personality come through in local policy critiques and nuanced market banter, particularly on the Carolinas.
For anyone in the multifamily, SFR, or BTR sector (or those watching the U.S. rental housing market), this episode delivers a comprehensive, nuanced, and actionable market check, balancing data detail with on-the-ground perspectives.