There is a lot of there are a lot of investors today, Jay, that are looking at the market and saying, multifamily starts in 2022. Were around 550,000. Multifamily starts in 2023. I have heard people talking about dropping down to 450,000. Given the backlog and the starts that went into the ground this year, I have also heard people bring that number down. Lower than that to a 350 number. But what is projected for 2024 is only 250,000 units. That lack of supply that is starting in ’23 and ’24 will present a fantastic new delivery market for ’25 and ’26. So what you should see is those developers who have the capability and have a good piece of property in a underserved market to put shovels into the ground in ’24 and ’25 and deliver into great markets in ’25 and ’26.
So I would expect us to see HUD’s D4 volumes increase in 2024. That is the reason we fell down and building tables in ’23 and we and our team are extremely focused on getting those numbers up in ’24.
Jay McCanless: Okay, very, very good. Thank you for the comprehensive answer on that. I guess the, and you’re not the only management team we’ve heard talking about looking past what happens in ’24, maybe ’25 for better market in ’25 and ’26 is that part of the reason that you think there is going to be kind of a reset in ’24. As people start to evaluate, look, look at those new opportunities. Because it’s, it sounds like you have in the management team has a pretty high degree of optimism in terms of volumes, getting better in ’24 and I guess is that just a function of what you know is coming from a refinance standpoint or do you believe you’re going to be able to take market share in certain areas to grow those volumes.
Willy Walker: I want to be really clear. We started ’23 with optimism that rates would stabilize and volumes would come back. And neither thing has happened. So I do not want to be misinterpreted as saying that we think that volumes are going up in 2024. We are right now planning for a redo of ’23 in ’24. We go above that fantastic we’re very focused on it. And that refine number I put out there should drive an increase in volumes in ’24. But we’ve got a war in Europe. We’ve got a war in Israel. We’ve got a threatening China in Taiwan. We’ve got a presidential election. And we’ve got a fiscal problem in Washington of printing more treasuries than the market can absorb that all could have significant factors on the 2024 market.
I’d love to see all of those things go away. And I’d also love to see us have some type of leadership in Washington that said that we’re not going to be having Janet Yellen issue a trillion dollars of debt every quarter. The nice part of that is that there is actual focus on that now. The nice part of that is that whomever becomes president of the United States in November of next year is going to know that the fiscal outlook for the United States government must change. But unfortunately, we have two people right now as the two candidates that look like they’re going to be the nominees of the Republican and Democratic parties, that neither one of them have shown any interest at any time in focusing on that issue. So what I want to be really clear is the dynamics of the commercial real estate industry would tell you that you should, in a stable rate environment, have volumes go up in ’24.
But you’re also talking to a Company and to a management team that has gone through a ’23, where every time we thought, we were going to get stability, stability did not appear. The final thing to it is commercial real estate is a slow rolling industry. Greg talked in his comments about us resolving a loan that defaulted in 2019 in 2023. So I think one of the other things is you watch CNBC in the morning and everyone’s talking about office or this and that. And back in May and July, everyone’s sitting there saying, you know, this is going to come crashing down on bank balance sheets. This is going to be a massive, massive issue. This is a slow rolling problem. Banks have plenty of capital to deal with this, as I have said for a very long period of time.
This is an earnings issue for banks. It’s not a capital issue for banks. The same thing is going to happen in commercial real estate, where ’23 has been a wait and see market. It is our expectation that ’24 is I’ve got to go market. People start to move. But there are a lot of factors that will play into whether ’24 becomes I’ve got to go market from a wait and see market.
Jay McCanless: Maybe turning to Alliant for a minute, you know, continue to see good numbers there. I guess maybe what you’re thinking about for that part of the business for ’24, is there anything positive or negatively we need to be thinking about as we model ahead?
Willy Walker: Well, as I mean, first of all, the Alliant acquisition has been a home run of an acquisition. Couldn’t be happier with the Company, couldn’t be happier with the management team and couldn’t be happier to what it’s done to walk in the lobby strategically in the affordable housing space. The second thing is that the tax credit syndication market, the amount of tax credits being allocated in the federal budget. There are many, many, many governors, senators from across the country who the number one issue on their minds is affordable housing and housing affordability. And so figuring out how LIHTC and low-income housing tax credits and HAP contracts that come out of HUD all play into the affordable housing equation and the ability to supply more affordable housing is a very, very important issue for ’24, ’25, ’26.
We are extremely well positioned there. And I think that given the breadth of the Walker & Dunlop platform, our ability to increasingly grow the size of our funds that we are raising around our tax credit business is very present. And the second thing is the dynamics of that market have very strong growth drivers over the next several years, because if you look at where supply has come into the multifamily market, it is coming at the high end, not at the bottom end or in the middle of the market. And so there is still dramatic growth drivers in the affordable housing space. And we feel extremely well positioned with Alliant to take advantage of that.
Jay McCanless: That’s great. Thank you, Willie. Thanks for taking my question.
Operator: We’ll return to the line of Jade Rahmani with KBW. Please go ahead.
Jade Rahmani: Thanks very much. You know, I wanted to ask about the W&D platform and its relative size. Where do you see the greatest growth opportunities? Would it be in small balance and affordable housing? Do you see C-PACE as a meaningful opportunity or is it on the asset management side, raising those funds, perhaps pursuing M&A there?
