When economic uncertainty dominates every headline, smart real estate and community association pros aren’t just reading the news, they’re figuring out how to stay ahead of it. You’re probably asking yourself, “What are others doing, and how can I stay one step ahead?”
Our latest Economic Sentiment Survey gives a peek behind that curtain. We talked to real estate and CAM finance leaders across the country to see how they’re navigating the challenges.
In this article, we’ll break down answers from our April 2025 AvidXchange Economic Sentiment Survey respondents what respondents are doing about inflation, investment slowdowns, and long-term planning, so you can borrow a page from their playbook (or avoid what’s not working).
How Property Managers Are Responding to Rising Costs, Rising Rents
When inflation surges, property managers face a tough decision: absorb the costs or pass them on. In the April 2025 AvidXchange Economic Sentiment Survey, 91% of real estate and community association management finance professionals expressed concern about the current economic climate. That concern isn’t theoretical—it’s hitting their P&Ls directly.
More than 84% of respondents reported inflation-driven vendor cost increases. Some property managers are attempting to shield tenants from sticker shock, but others are quietly adjusting common area maintenance fees or embedding costs into lease renewals.
“Our clients are seeing a trend where operators aren’t just raising base rents,” says Jon Land, Senior Director of Sales at AvidXchange. “They’re passing on costs through ancillary fees—like parking, maintenance, and even amenity access—in ways that are less visible but equally impactful to tenants.”
Community association managers are facing similar pressures, often with less flexibility. Managing budgets for HOAs and community boards means absorbing cost increases without the ability to raise rents or fees too aggressively.
Many community association managers are adjusting their maintenance schedules, delaying capital repairs, or renegotiating vendor contracts to keep costs contained and avoid surprising homeowners.
“Community association finance teams don’t always have the same pricing levers as traditional property managers,” says Land. “They’re walking a tightrope: balancing rising costs with fixed expectations from homeowners, which means getting creative to protect service levels.”
Real Estate Development Slows Down
The challenge isn’t just about managing daily expenses. It’s also shaping long-term decision-making in real estate.
According to the survey, nearly 26% of real estate respondents are reducing or delaying capital investments. That means putting new developments on hold, scaling back expansion plans, and approaching risk with greater caution.
Add in rising interest rates and continued volatility in material costs, and it’s no surprise that groundbreakings are down in many markets.
We’re now in a post–zero interest rate environment—something many residential real estate professionals haven’t had to manage since before the 2008 financial crisis. Mortgage rates have hovered near 7% since 2022, and they’re proving to be stubbornly sticky. That puts pressure on deals, investment timelines, and how finance leaders think about operational strategy.
“We’re seeing our clients shifting strategy: they’re thinking of 2025 as a planning year, not a building year,” Land notes. “It’s about strengthening financial resilience, optimizing existing portfolios, and preparing for strategic moves when the dust settles.”
The National Association of Home Builders has reported dips in new commercial and multifamily housing starts this year, further signaling a pullback across the board.
Financial Planning Shifts Strategies
The real estate industry has always been cyclical, but these days, the swings are happening faster and hitting harder. CFOs and finance directors are using scenario planning as a way to brace for a wide range of outcomes.
According to our Economic Sentiment survey, 53% of real estate companies have already made moderate adjustments to their business plans, and nearly 9% have made major strategic changes.
“More than ever, real estate finance teams are stress testing multiple scenarios: What happens if interest rates spike again? If tenants default? If supplier costs surge another 10%?” says Land. “Scenario modeling keeps you from feeling blindsided.”
This shift has also ushered in greater demand for real-time financial tools, particularly in accounts payable automation, to track costs and manage cash flow more nimbly.
Property Values, Cap Rates, and the Risk Perception Reset
Real estate has long been viewed as a reliable investment. But as economic uncertainty continues, many institutional and private investors are taking a fresh look at how they evaluate property values.
Cap rates may come down a bit in 2025, but they’ll probably stay higher than what we saw in the 2010s. That’s because interest rates are still elevated, and big-picture drivers like budget deficits and steady economic growth are keeping pressure on the system, according to CBRE’s 2025 U.S. Real Estate Market Outlook.
Adding to that reality: nearly 59% of our survey respondents said they’re re-evaluating budgets and cutting discretionary spending as part of their recession planning.
“Right now, it’s not about being flashy—it’s about being tight, disciplined, and efficient,” says Land. “Well-managed buildings with strong digital infrastructure and cash visibility are holding their value better than their peers. That’s pushing the industry to get leaner and smarter.”
Doing More with Less: The Push Toward Financial Automation
Understaffed finance teams are another ripple effect of economic uncertainty. Over half (56%) of our survey respondents say they’re being asked to “do more with less” to a moderate or great extent—a reality that’s driving increased investment in automation.
In fact, 51% of real estate and community association management respondents are prioritizing AI and machine learning, while 47% are focusing on data security and compliance tools.
“In this climate, it’s less about replacing people and more about scaling smarter,” Land explains. “We’re helping clients automate routine AP tasks so they can grow their business without drowning in manual work.”
In other words, a positive side effect of automation is ensuring your business can keep growing without constantly needing more people. Real estate companies are using this moment to scale without breaking the bank or burning out their teams.
To what extent is your finance department being asked to “do more with less” due to current labor market challenges? (e.g. talent shortages, wage pressures)?
Final Thoughts: Embracing Digital Resiliency as the New Advantage
Real estate and community association professionals have always been adept at adapting. From revising rent strategies to overhauling tech stacks, leaders across the industry are proving that agility is their most valuable asset.
Economic uncertainty remains a central focus across the industry, but with the right financial tools and mindset, real estate operators are better positioned than ever to navigate it.
“The question isn’t whether uncertainty will continue,” concludes Land. “It’s how we respond to it that will define our success.”
Want more data-driven insights on navigating economic uncertainty?
Download the full Economic Sentiment Whitepaper from AvidXchange.
