How 2013 Signals the Playbook for 2025: A Return to Fundamentals in Real Estate

And many are finding it by looking back—to 2013, a pivotal year in real estate that marked the early stages of recovery following the Great Financial Crisis. Today, the parallels are striking and instructive.

In 2013, the U.S. multifamily market was on a firm upward trajectory. Multifamily building permits had climbed to 155,000 units—up nearly 70% from the 2010 low. This wasn't a return of speculative building, but a response to tangible demand. Simultaneously, vacancy rates were declining steadily—from 10.5% in 2008 to 7.6% by 2013—demonstrating that the absorption of units was outpacing supply. Cap rates continued compressing, dropping from 7.5% in 2008 to 6.2% in 2013, reflecting increased investor confidence and capital inflows into income-producing assets.

Crucially, 2013 was an era of constrained financing. The excesses of the previous cycle had been burned away, and only deals with real fundamentals were getting done. That meant investors needed to understand their markets block by block, submarket by submarket. This disciplined capital environment favored local knowledge, long-term thinking, and the strategic use of value-add improvements.

Today, we see the same structural setup forming again—especially in underbuilt but demographically stable markets like St. Louis and Indianapolis. Institutional developers are circling, local governments are ramping up infrastructure spending, and neighborhood gentrification cycles are in early innings. Once again, multifamily and mixed-use developers who act decisively, conservatively, and creatively are poised to capture long-term yield and upside.

What differentiates now from 2019–2021 is the return of margin of safety. With cap rates normalizing, rents stabilizing, and the era of “growth at any cost” ending, the winners of the next cycle will resemble the winners of 2013: thesis-driven, community-embedded, and operationally excellent.

In short, if 2019 was the blow-off top, and 2021 the peak of irrational exuberance, 2025 is the new 2013—a launchpad, not a landing.

Sources & References

US Census Bureau. (2025). Annual Tables, Charts, and Maps. https://www.census.gov/construction/bps/annual.html

US Census Bureau. (2025). Building Permits Survey (BPS). https://www.census.gov/construction/bps/index.html

US Census Bureau. (2025). Housing Vacancies and Homeownership (CPS/HVS) – Data. https://www.census.gov/housing/hvs/data/index.html