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2024 FORECAST
National Market
Institutional Markets
National Report
2024 National Apartment Inventory Change
2024 National Apartment Rent Change
Atlanta
Austin
Boston
Chicago
Dallas-Fort Worth
Houston
Las Vegas
Los Angeles
Orange County, CA
Orlando
Philadelphia
Phoenix
Salt Lake City
San Diego
San Francisco-Oakland
San Jose
Seattle-Tacoma
South Florida
Washington, D.C.
NATIONAL
View Report
OCCUPANCY RATE (Q4 2024)
UP 20 BPS YOY
94.5%
The U.S. multifamily market is facing a critical juncture coming into 2024. Residents are facing a housing shortage, while apartment builders are on pace to deliver record-high new inventory. This inflow of apartments comes as developers ramped up activity, with construction starting on approximately 462,100 multifamily units in 2021 and 531,000 more in 2022. At the same time, the average length of time until completion increased to contribute to the rise in deliveries this year. The 670,071 units scheduled to come online by year-end represent a 3.5% annual inventory increase. The additional housing options will be essential, as apartment leasing activity in 2023 rallied from negative net absorption during 2022 and is projected to jump this year. Part of the recovery can be attributed to the tight housing market. With approximately 60% of outstanding mortgages below 4%, many homeowners stayed in place as reflected by active listings last year at half the pre-pandemic average. At the same time, employers continued to hire at a healthy pace. These trends are projected to persist in 2024, albeit at a more measured pace than last year. With a Federal Funds rate cut projected this year, mortgage rates could lower to facilitate sales. U.S. payrolls are forecast to expand 0.4% over the next 12 months. Simultaneously, the unemployment rate is expected to rise as more people look for work. This trend became more prevalent last year as more households ran out of savings built up at the start of the pandemic, including early retirees who underestimated their expenses.
Continued Hiring, Additional Inventory to Expedite Apartment Leasing
Market Employment Trends
Effective Rent
Occupancy
NATIONAL Employment Trends
NATIONAL Apartment Trends
NATIONAL Sales Trends
RENT SHARE OF WALLET (Q4 2024)
30.7%
UNCHANGED YOY
EFFECTIVE RENT (Q4 2024)
$1,882
UP 3.0% YOY
View INTERACTIVE MAP
national apartment inventory CHANGE
2024
National apartment Rent CHANGE
Effective Rent & Occupancy
Absorption & Deliveries
Net Absorption
Deliveries
*Projected **Forecast
UP 0.4% YOY
EMPLOYMENT (DEC. 2024)
157,069,800
UP 50 BPS YOY
UNEMPLOYMENT (DEC. 2024)
4.4%
UP 2.9% YOY
MEDIAN HOUSEHOLD INCOME (DEC. 2024 SAAR)
$73,451
Employment
Unemployment
Linear Employment
Price Per Unit
Cap Rate
Price Per Unit & Cap Rate
DOWN 9.1% YOY
PRICE PER UNIT (2024 AVG)
$210,971
UP 30 BPS YOY
CAP RATE (2024 AVG)
5.3%
Note: Effective rent and occupancy reflect stabilized properties and does not include preleased units or properties in lease-up. A newly constructed property is considered stabilized once it becomes 85% occupied.
Unless noted otherwise, data and images pertaining to rent, occupancy, employment, unemployment, income, price per unit, and cap rate are year-end figures. Absorption and construction figures are full-year totals, unless noted otherwise. Numbers for 2023 are projected values. 2024 figures are forecast projections.The apartment sales information represents transactions of apartment properties with a sales price of $2.5 million or more, unless otherwise indicated.
Sources: Sources: RealPage; CoStar Group; Yardi Systems
Sources: Berkadia; Moody's Analytics
Unless noted otherwise, data and images pertaining to rent, occupancy, employment, unemployment, income, price per unit, and cap rate are year-end figures.Absorption and construction figures are full-year totals, unless noted otherwise. Numbers for 2023 are projected values. 2024 figures are forecast projections.The apartment sales information represents transactions of apartment properties with a sales price of $2.5 million or more, unless otherwise indicated.
Sources: CoStar Group; MSCI
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Annual Inventory Change
Hover Over the Map for Market Rankings
0.0% - 1.5%
1.6% - 3.0%
3.1% - 4.5%
4.6% - 6.0%
6.1% - 7.6%
Hover Over the Map for More Info
TOP 10 MARKETS
Source: RealPage
New Orleans
0.6%
16.3%
01. Huntsville, AL
11.9%
02. Colorado Springs, CO
9.8%
05. Charlotte, NC
8.2%
09. Phoenix, AZ
7.7%
10. Nashville, TN
7.5%
10. Charleston, SC
10.6%
03. AUSTIN, TX
9.1%
07. Salt Lake CITY, UT
8.7%
08. BOISE, ID
El Paso
Albuquerque
4.3%
Denver
5.4%
DETROIT
1.5%
Ann Arbor
0.9%
Indianapolis
3.4%
Milwaukee
2.0%
1.1%
Madison
1.6%
St. Louis
1.4%
Kansas City
3.0%
Wichita
Tulsa
1.3%
Oklahoma City
Des Moines
4.5%
Omaha
2.7%
Little Rock
2.1%
Baton Rouge
Cleveland
Columbus
3.3%
Cincinnati
1.9%
Lexington
1.7%
Louisville
Knoxville
3.5%
Chattanooga
3.9%
Memphis
Birmingham
1.8%
Mobile
New York
3.1%
Richmond
3.2%
Portland
2.6%
4.9%
Sacramento
2.2%
Ventura County
Inland Empire
2.5%
Orange County
Tucson
RENO
5.0%
2.9%
WEST MICHIGAN
2.3%
Virginia Beach
Pensacola
Greenville
jacksonville
6.6%
ATLANTA
Tallahassee
5.7%
BALTIMORE
Minneapolis- St. Paul
Tampa- St. Petersburg
Dallas- Fort Worth
5.2%
Northern New Jersey
SAN ANTONIO
5.8%
HOUSTON
2.8%
Apartment Inventory CHANGE
2024 NATIONAL
2024 National Apartment Rent Change Map
VIEW
2024 Forecast National
10.5%
04. Raleigh-Durham, NC
Annual Inventory Change: 3.5%
3.7%
10. Oklahoma City, OK
01. Madison, WI
4.2%
03. Virginia Beach, VA
02. San Jose, CA
3.8%
08. Ann Arbor, MI
4.0%
04. New Orleans, LA
06. Richmond, VA
09. Omaha, NE
Nashville
Colorado Springs
2.4%
Huntsville
1.0%
3.6%
Jacksonville
Reno
BOISE
Charlotte
Raleigh-Durham
Charleston
Apartment Rent CHANGE
2024 National Apartment Inventory Change Map
YOY EFFECTIVE RENT CHANGE
1.6% - 2.2%
2.3% - 2.9%
3.0% - 3.5%
3.6% - 4.0%
Annual Effective Rent Change: 3.0%
05. Orange County, CA
07. TUCSoN, AZ
UP 10 BPS YOY
92.4%
Despite the increasing apartment inventory levels across the Atlanta metropolitan area, projections indicate a modest upturn in occupancy rates anticipated for 2024. The ascent in apartment occupancy is attributed to a considerable number of renters opting to renew their leases, coupled with housing demand creating a substantial influx of new residents migrating to the region. An estimated 38,900 net new residents will make Atlanta their home in the upcoming year, contributing to an annual 10-basis-point increase in occupancy to 92.4% in the fourth quarter of 2024. Additional factors will foster the surge in leasing activity, including an annual employment growth rate of 0.6%, equating to 19,700 net new jobs, and a rise in household formation is projected to surpass the pace of population growth. Also, the cost associated with renting continues to maintain a noteworthy margin of affordability compared to homeownership despite a projected decline in home values. Of all submarkets, Midtown Atlanta accounts for approximately 12% of all new units, which is expected given its more than 15 million square feet of Class A office space and access to large corporate headquarters, such as Coca-Cola and Invesco. Simultaneously, the trade, transportation, and utilities sector, which commands the largest share of all jobs, is projected to grow 0.8%, or 5,200 net jobs, by the conclusion of 2024. The expansion of the sector comes on the heels of a logistics boom throughout the Atlanta area given its reputation as a transportation hub, friendly business environment, and affordability.
Apartment Leasing to Surge in 2024 with Substantial Net In-Migration
Employment Trends
Apartment Trends
Sales Trends
21.6%
DOWN 20 BPS YOY
$1,709
UP 2.0% YOY
UP 0.6% YOY
3,091,700
UP 60 BPS YOY
$95,156
DOWN 10.5% YOY
$172,551
Sources: RealPage; CoStar Group; Yardi Systems
Source: Moody's Analytics
Sources: Berkadia; CoStar Group; MSCI
5.1
DOWN 12.2% YOY
$179,436
$102,723
DOWN 10 BPS YOY
UP 1.2% YOY
1,348,300
The Austin multifamily market has gained momentum over the past two years, and 2024 looks to be a record-breaking year in terms of both the level of supply and net absorption. The metro will deliver the nation’s third largest volume of new units, at 32,319, and the third highest number of net units absorbed, at 30,700. During the same period, occupancy will increase by 20 basis points. This activity likely results from continued below-average renewal rates and increased household formation, which is expected to increase 2.2% in 2024. This will be supplemented by a steady population increase and solid net in-migration as well as well as employment growth. Metro Austin’s population is projected to grow 2.0% annually to more than 2.5 million people, with a net migration of 35,400 people. Attracting people to the metro this year will be a 1.2% employment growth. An additional factor bolstering Austin’s absorption is median household income increasing at a higher rate than the projected effective rent. At the end of 2024, the effective rent is projected to advance 1.2% to $1,654 per month, while the income level is projected to grow 2.9% annually. The increased median household income will drop rent share of wallet by 40 basis points to 19.3%. While the price of single-family homes is anticipated to drop, mortgage rates are expected to remain high, and there is still not enough inventory to satisfy demand, thus contributing to the high apartment absorption, particularly in luxury units in suburban submarkets like East Austin, Cedar Park, and San Marcos.
All-Time High Absorption Bolstered by Job Growth and In-Migration
AUSTIN
19.3%
DOWN 40 BPS YOY
$1,654
UP 1.0% YOY
93.2%
Source: Sources: Berkadia; CoStar Group; MSCI
DOWN 9.7% YOY
$368,272
$117,449
UP 70 BPS YOY
2,899,200
As more people choose Boston to call home, the apartment market will benefit in 2024. Like many major metros experienced at the beginning of 2020, more people left Boston than moved to the area. That urban flight began to reverse last year as net migration to Boston shifted positive. This trend is expected to continue this year and contribute to an acceleration in household formation. After 0.2% expansion in 2023, the metro is forecast to gain 8,000 additional households for a 0.4% annual increase. Many of the households will choose to rent as the cost of homeownership rises amid higher lending costs, and active single-family listings are at approximately half the pre-pandemic levels. Also, single-family completions this year will be below average, following slower single-family starts in the last five years. While the single-family development has been sluggish, the multifamily sector has filled the housing gap. Nearly 8,500 units are scheduled to come online in 2024, the second consecutive year of rising deliveries. Builders will add new inventory to every submarket. The additional inventory will facilitate leasing activity as net absorption accelerates across the metro. Strong leasing activity will result in metrowide occupancy rising to an average of 95.9% in the fourth quarter of 2024. The 40-basis-point, year-over-year increase will move the occupancy rate closer to the 96% average in the five years leading up to 2020. The healthy occupancy amid robust inventory growth will underpin a 3.3% annual advancement in monthly effective rent to an average of $3,020 in the fourth quarter of 2024.
Strong Demographic Trends Will Lift the Multifamily Sector
BOSTON
30.9%
$3,020
UP 3.3% YOY
95.9%
UP 40 BPS YOY
6.8%
$179,994
$90,491
4.7%
UP 0.2% YOY
4,796,800
As more and more Chicago workers come back to the office, healthy apartment demand is expected to continue this year. Weekly security badge swipes at offices rose to approximately 50% of the pre-pandemic levels across Chicago in 2023. Local employers’ emphasis on in-person work put the office bounce-back among the strongest of the large metros across the country. This benefited apartment operators, especially in the urban core. Of the more than 6,800 net units absorbed metrowide in 2023, approximately 2,900 additional leases were signed in the neighboring Bronzeville/Hyde Park/South Shore and The Loop submarkets. Each area features a high concentration of office jobs, highly sought-after community amenities, and limited, high-cost housing for sale. These trends have persisted in recent years, and apartment operators worked to fill the housing demand, especially in The Loop. The submarket is expected to again lead the metro for deliveries, with approximately 2,400 units scheduled to come online by year-end. The new inventory will facilitate robust leasing activity. Even so, the combination of new leases and rental renewals are projected to slightly trail inventory growth and lead to a dip in occupancy. These trends will be reflected metrowide, as Greater Chicago apartment occupancy is forecast to lower 10 basis points year over year to an average of 95% in the fourth quarter of 2024. Occupancy will still be 10 basis points higher than the five-year average leading up to the pandemic. Effective rent is projected to rise 3% over the next four quarters.
Healthy Economy and Robust Demand Spur Strong Apartment Fundamentals
CHICAGO
26.7%
$2,010
95.0%
5.5%
DOWN 8.5% YOY
$155,451
$89,297
4,344,900
In 2024, Dallas-Fort Worth will again claim the top spot for both metrics nationwide as it has for four of the past five years. Dallas-Fort Worth will eclipse Phoenix, the market with the second highest new supply by 43.0% and net absorption by 44.3%. Though deliveries will outweigh leasing activity, the gap is projected to be closer than it has been since demand outpaced supply in 2021. Though net in-migration could taper off compared to historical averages, approximately 68,400 people will move to the metro in 2024, and households are projected to grow 1.7%. Furthermore, modest population and household expansion increases the stress on the metro’s tight single-family home market, as MetroTex expects sales to remain low in 2024 as mortgage rates stay above their pre-pandemic average, pushing new residents to rent. As net absorption and lease renewals narrow the disparity between supply and demand, multifamily operators could see a slight incline in the average occupancy rate by around 20 basis points to close the year at 93.4%. The effective rental rate is also forecast to increase year over year 2.9% to $1,589 per month. The locus of new supply and demand during 2024 will remain in Collin County as the dominant submarkets of Allen/McKinney and Frisco continue to lead the metro, followed by neighboring North Dallas submarket, Denton. Continued growth in northern suburbs is a testament to the rapid development of new jobs and entertainment options in the Frisco/Plano TX-121 corridor that are enticing to the rising cohort of family-aged millennials.
Occupancy Rises as Robust Rental Demand Absorbs Supply Wave
Dallas-Fort worth
21.4%
$1,589
93.4%
DOWN 10.3% YOY
$128,639
UP 3.1% YOY
$81,435
4.1%
3,404,000
Houston is poised to remain one of the top housing markets in the nation thanks to its affordability compared to other large metros, steady population expansion, and growing job base. Apartment levels of supply and demand are expected to be comparable to 2023, with renters occupying 16,163 net units as developers bring 21,534 units online in 2024. The gap between supply and demand will dampen occupancy by 50 basis points to 92.2% by year-end. This variance is no cause for concern, as Houston’s occupancy has fluctuated between 91.0% to 93.5% over the past 10 years. In fact, landlords are anticipated to increase the average effective rent 2.2% in 2024 to $1,398 in the fourth quarter. The strength of Houston’s multifamily market is built in part on consistent population growth, with an expansion of 1.4% expected for 2024 and net in-migration estimated at nearly 54,000 people. New residents are drawn to abundant jobs and a cost of living that averaged around 28% lower than other metros of comparable size in 2023. Houston’s labor market is projected to expand by 1.0% in 2024, adding 35,100 jobs. The trade, transportation, and utilities sector, followed by the private healthcare and education sector will underpin job growth, as both seek to capture Houston’s growing consumer base. Trade and transportation employers will leverage Houston’s expanding global port. Healthcare and education operations build on the booming life sciences hub that radiates from Texas Medical Center, just south of Midtown, and the metro’s burgeoning northwestern suburbs.
Strong Population Growth and Economic Expansion Drive Houston Apartment Market
20.6%
$1,398
UP 2.2% YOY
92.2%
DOWN 50 BPS YOY
6.0%
DOWN 7.8% YOY
$153,562
UP 2.6% YOY
$78,593
UP 1.4% YOY
1,154,800
Las Vegas’s apartment fundamentals are expected to improve this year amid economic and population growth. After a year of negative effective rent and occupancy change, Las Vegas’s effective rent is expected to increase 2.5% in 2024, while occupancy is set to rise 60 basis points at the same time. This is underpinned by projected demand to outpace deliveries in 2024. Despite high volumes of incoming inventory, 6,600 estimated units, over 7,400 units are forecast to be absorbed. Both are record-setting figures. Strong leasing activity will be the result of population and economic growth. Since the onset of the pandemic, Greater Las Vegas has gained new residents, especially in North Las Vegas and Henderson. According to a study by the University of Nevada Las Vegas, 115 people move to Clark County each day. This is expected to continue this year, with more than 38,300 people forecast to move to Las Vegas than move out. The metro’s affordable cost of living paired with luxurious urban amenities is a major contributor to attracting new residents, another being the thriving economy. The return of tourism has revitalized Las Vegas’s economy, with numbers outpacing pre-pandemic figures by 6.5% last year. In 2024, the city will be hosting Super Bowl LVIII and a Formula 1 race, which are projected to have an economic impact of nearly $2 billion. Economic expansion is expected to continue into 2024, with Las Vegas payrolls forecasted to expand 1.4%, growing more than economic hot spots Austin and Orlando.
Expanding Economy Supporting Stellar Multifamily Fundamentals
LAS VEGAS
22.8%
$1,492
UP 2.5% YOY
DOWN 8.8% YOY
$273,764
UP 2.7% YOY
$90,700
UNCHANGED
4,693,000
Builders are expected to complete 22,055 apartment units in Los Angeles County in 2024. The new apartments, representing 1.9% of existing units, will be welcome this year, as 21,600 newly formed households are anticipated, and homeownership in the county will remain out of reach for many renters. Approximately 25% of the new apartments will be in the Mid-Wilshire submarket, an area developers target because of its convenience to major employers and entertainment attractions in the urban core. In the next few years, residents in the Mid-Wilshire submarket will have easy access to the expanded Fox Future Studios and the new Apple Inc. campus, which together will support thousands of new jobs. Many of those residing in the Downtown Los Angeles and Mid-Wilshire submarkets will enjoy shorter commutes when the Metro Purple Line extension is completed in phases starting in 2024 and culminating in time for the 2028 Summer Olympics. Vibrant apartment demand is anticipated this year in the historically mundane South Los Angeles submarket. Renters are increasingly appreciating the submarket’s central location between employment hubs in Downtown Los Angeles and the South Bay communities, its more affordable rents, and its proximity to major attractions, like Sofi Stadium. Robust leasing activity across the county is expected to outpace deliveries in 2024, spurring a projected 30-basis-point annual rise in occupancy to 95.6% by the fourth quarter. The heightened demand will enable a 2.9% annual increase in average effective rent by year-end.
Robust Apartment Demand Projected to Outpace Heightened Deliveries in 2024
LOS ANGELES
38.5%
Up 10 BPS YOY
$2,907
95.6%
DOWN 3.3% YOY
$437,081
$116,113
DOWN -10 BPS YOY
UP 0.7% YOY
1,730,500
The high cost to develop and the scarcity of available land have historically tempered Orange County’s multifamily pipeline. The county’s apartment inventory is forecasted to grow 1.4% in 2024, compared to 3.5% nationwide. New deliveries are expected to total 3,882 units countywide in 2024, in line with the 3,823-unit annual average in the five years preceding the pandemic. Coupled with healthy apartment demand, a clear advantage of the measured inventory growth is the county’s projected fourth-quarter 2024 occupancy rate of 96.3%, one of the highest projected rates among the largest metros in the country. The highest occupancy rates in the county are forecasted in the contiguous Buena Park/Cypress, Garden Grove/Westminster, and West Anaheim submarkets, which because of their more affordable rents are sought after by budget-minded renters. The greatest leasing activity in 2024 is expected to take place in the submarkets with the most deliveries: South Irvine, Tustin/West Santa Ana, and West Irvine, which are home to large employment hubs with world-renowned companies. Apartment demand in these submarkets is predicted to trail deliveries, resulting in year-over-year reductions in occupancy by the fourth quarter—though the occupancy rate is expected to remain above 95% in all three submarkets. Countywide, operators are anticipated to raise average monthly effective rent to $2,922 by year-end, a projected 3.9% increase—a greater rate of increase than most metros in the country.
Orange County Apartment Occupancy and Rent Growth Expected to Lead Most Metros
ORANGE COUNTY
30.2%
$2,922
UP 3.9% YOY
96.3%
5.4
DOWN 9.8% YOY
$197,965
UP 3.2% YOY
$79,327
UP 80 BPS YOY
UP 1.3% YOY
1,472,700
Apartment developers continue to invest in the Orlando markets as positive demographic trends support that confidence. More than 15,400 units are scheduled to come online over the next four quarters, the highest annual total on record. Additional apartments are needed, as Greater Orlando has faced a housing shortage in recent years due in part to high population growth, a flourishing labor market, and low for-sale housing inventory. While new apartments are on pace to be delivered in every submarket, a metro-leading 3,200 will be in the South Orange County submarket. The area is home to key tourism establishments that include Walt Disney World Co., Universal Orlando Resort, and SeaWorld Orlando. Hiring in the leisure and hospitality sector has led all other employment sectors in recent years and is projected to do so again in 2024. The additions in the industry will not be limited to typically mid- to low-wage positions. Lockheed Martin Corp. continues to grow its workforce at their Missiles and Fire Control campus. The broad-based job creation will create rental demand across all classes of apartment product, as net absorption is projected to keep pace with deliveries in the South Orange County submarket. A surge in leasing activity is forecasted to extend across Greater Orlando this year. The rise in new leases signed combined with approximately half of current renters renewing their leases will contribute to occupancy rising 30 basis points annually to an average of 94.1% in the fourth quarter of 2024. The 2.4% annual rise in effective rent this year will erase the decrease in 2023.
Continued Job Creation Supporting Rise in Apartment Occupancy, Even Amid Supply Wave
ORLANDO
27.5%
$1,817
UP 2.4% YOY
94.1%
DOWN 9.9% YOY
$203,206
$92,093
UP 0.3% YOY
3,125,600
Philadelphia is projected to continue as a relocation destination for individuals seeking a more affordable cost of living in the Northeast. Since 2019, Greater Philadelphia recorded consistent urban in-migration from high-cost, large metros, according to the Federal Reserve Bank of Cleveland. This continued last year as monthly effective rent averaged $1,799 in the fourth quarter of 2023 to keep the cost of renting in Greater Philadelphia lower than the national average, as well as New York, Boston, and Washington, D.C. The trend is projected to continue as the average monthly effective rent is forecast to advance 3% this year to $1,854 in the fourth quarter, keeping rent below the national average and the other major Northeast markets. Beyond the lower cost of living, a healthy employment environment will attract new residents and create new households in the metro. The labor force is projected to grow 0.3% this year, driven by private education and healthcare hiring. Home to the University of Pennsylvania and Virtua Health, the sector is a pillar of the local economy and industry employers are forecast to add a metro-leading 3,500 workers by year-end. These private education and healthcare jobs will help elevate the metro’s median household income 3% over the next year, underpinning apartment operators’ confidence to raise rent. Another factor supporting the rise in rent will be occupancy remaining nearly unchanged amid 3.1% annual inventory growth. At a projected 95.5% in the fourth quarter of 2024, the occupancy rate will only be down 10 basis points year over year.
Abundant Renters and Building Bonanza Keep Philadelphia’s Center City Hot
philadelphia
24.2%
$1,854
95.5%
5.6%
DOWN 8.9% YOY
$278,737
$92,011
2,405,400
With strong recent population and employment growth, a rise in supply and demand will land the Phoenix apartment market second in the nation this year. Projections show builders completing 33,362 units as renters occupy 32,254 net units. Submarkets with the higher rates of inventory change should expect annual rent reductions, but only four should post reduced occupancy. Greater Phoenix’s average effective rent is projected to increase 2.4% to $1,641 per month in the fourth quarter of 2024 as occupancy elevates 30 basis points to 93.0%. The primary factor in the apartment market’s jump among national rankings in 2024 is steady population growth at an estimated 1.5% this year, 20 basis points above the annual average growth during the past five years. As in 2023, population expansion this year will stem from births rather than in-migration to the Phoenix Metro as more millennials begin to bear children. This is in conjunction with a projected 2.2% growth in households over the same period. As interest rates remain high relative to the pre-pandemic average, real estate experts expect the price of single-family homes to rise incrementally as well, maintaining the barrier to homeownership that persisted through 2023. The buildup and popularity of Avondale/Goodyear/West Glendale is an example of how growing millennial households will drive the market in 2024, as it stands to gain over 8,800 units. The submarket maximizes wallet share of growing households with an effective rent at least 2.5% less than the other submarkets with comparable build years and sizes.
Rent and Occupancy to Increase Alongside Absorption and Deliveries
PHOENIX
$1,641
93.0%
$212,696
$103,471
843,500
Heading into 2024, the Salt Lake City apartment market is forecast to have a record amount of net absorption and incoming inventory. The metro is expected to have 11,793 units come online, followed closely by 11,768 net units absorbed by the end of the year. The projected demand and deliveries figures will exceed the former record of 8,275 new units in 2023 and 6,648 net move-ins in 2021. Multifamily builders and potential residents will target the South Salt Lake/Murray and Downtown Salt Lake City/University submarkets as they offer proximity to major employers. This multifamily growth is underpinned not only by a healthy Salt Lake City economy but also by a shortage of single-family housing, as the metro in 2023 had the lowest number of single-family housing completions since 2015. Over the past five years, the local payrolls have expanded by over 111,100 net jobs. Specifically, the professional and business services sector grew 17%. More tech firms and startups have moved to the area creating a new tech paradise, which earned Salt Lake City the nickname the Silicon Slopes. Looking ahead, Utah is expected to see the largest growth in its tech workforce from 2023 to 2033, expanding roughly over 30% according to CompTIA’s study. With new leases keeping pace with incoming inventory and sustained lease renewals, the Salt Lake City metro’s occupancy rate is set to rise 50 basis points, reaching 94.2% by the fourth quarter of 2024. Strong apartment fundamentals and a strong economy give apartment operators leeway to raise effective rent 2.4% in 2024.
Healthy Economy Prompts an Uptick in Apartment Demand
SALT LAKE CITY
18.8%
$1,619
94.2%
Up 50 BPS YOY
DOWN 6.4% YOY
$429,122
$108,907
1,589,400
Tourism heavily supports the metro’s economy as San Diego welcomes roughly 28.8 million visitors annually and is a top U.S. travel destination. In July 2023, San Diego came in first across all top 25 markets for hotel occupancy. Group and corporate travel regaining momentum is a promising sign for 2024 as the city’s convention and meeting demand continues to recover. As tourism booms, the leisure and hospitality sector is projected to expand the most compared to all other sectors, adding 9,300 net jobs to local payrolls in 2024. Gains are also expected in the finance and healthcare industries. These additions will boost leasing activity, with 5,791 projected net move-ins by the end of the year, up from 1,782 net units absorbed in 2023. Also facilitating the rise in leasing will be 6,387 estimated units to be delivered by year-end. With the record amount of inventory flooding the market in the upcoming year, occupancy is predicted to drop 10 basis points. Despite this, metrowide occupancy will be at a healthy level and on par with the 10-year, pre-pandemic average, resting at 96.1% at the end of 2024. The Downtown San Diego/Coronado submarket will be the designated hot spot this year, accounting for 42% of the market’s incoming inventory and 40% of metro demand. The submarket’s popularity is underpinned by young professionals’ attraction to San Diego’s healthy local economy. In 2024 and beyond, substantial office development across downtown could bring more renters to the submarket as these buildings open.
Thriving Tourism Industry Supports Employment and Apartment Demand
SAN DIEGO
32.4%
$2,938
UP 3.4% YOY
96.1%
DOWN 9.6% YOY
$364,277
UP 3.6% YOY
$144,435
UP 0.9% YOY
2,568,400
The pandemic flight from the Bay Area showed signs of reversing last year and is expected to continue in 2024. Pandemic restrictions and a growing remote work environment spurred more than 178,900 people to move out of the San Francisco-Oakland metropolitan area than moved in from 2020 through 2022. Last year saw many large employers push for a return to the office. This move has contributed to increased demand for housing in surrounding areas and helped to stabilize apartment occupancy amid sustained deliveries. The economic growth extended beyond white-collar jobs, as the leisure and hospitality industry recovered amid regained momentum for tourism levels. The metro experienced an uptick in domestic and international travelers during 2022 and is projected to reach 23.9 million visitors in fiscal year 2023, according to the San Francisco Travel Association. The heightened pace of travel to the Bay Area is expected to result in leisure and hospitality employment gains during 2024. The industry is forecast to expand by 13,300 net new jobs, leading all employment sectors. The low- to high-wage job creation will benefit apartment operators across all product classes, as renters are forecast to sign 9,364 net new leases than move out. Net absorption is expected to outpace the 7,139 units set to come online in 2024, contributing to a 50-basis-point increase in average occupancy. At the same time, a 3.6% growth in rental rates is expected by the close of 2024.
Pandemic Exodus Reversal Boosts San Francisco-Oakland Apartment Market
SAN francisco-oakland
25.2%
$3,032
DOWN 9.5% YOY
$379,708
$162,311
1,201,800
The recent surge in the return-to-office trend has resulted in a notable upswing in both office occupancy rates and the demand for apartments across the San Jose metropolitan area. This resurgence correlates with a broader expansion in total employment figures, as the labor force is forecast to increase 0.9% by the end of 2024. Notably, downtown-based companies, such as Zoom and Adobe, have instituted mandates requiring their employees to work in the office for a minimum of three days per week. The scarcity of accessible and reasonably priced housing in the San Jose metro has steered residents towards apartments to address their housing needs. Projections indicate an annual decrease in home prices, although they are anticipated to remain above $1.7 million by the conclusion of 2024. This pricing outlook places homes beyond financial reach for a broad spectrum of residents, including high-wage earners. The introduction of 5,554 new apartment units by year-end is expected to nearly align with the pace of absorption, indicating a consistent demand for housing. Amid the rise in new apartment offerings, occupancy rates are forecast to remain level, giving a sense of assurance among apartment operators. The stability is complemented by a consistent annual growth in median household income, projected at 3.2% in 2024. Positive economic indicators and the equilibrium between supply and demand provide apartment owners with the confidence to increase rents. Monthly effective rent is expected to reach $3,186 in the fourth quarter of 2024 for an annual gain of 4.4%.
Sticky Home Prices, Return-to-Office Mandates Bolster Apartment Demand
SAN JOSE
23.6%
Up 30 BPS YOY
$3,186
UP 4.4% YOY
unchanged yoy
$283,473
$115,827
UP 0.5% YOY
2,185,700
Renters returned in full force to the Seattle-Tacoma metropolitan area in 2023, a trend expected to amplify this year. Annual net absorption last year was nearly 10 times the volume during 2022, as Amazon, Microsoft, Meta, Google, and T-Mobile US announced or implemented hybrid work policies in 2023. The growing return-to-office movement benefited the urban core, as more than half of downtown employees were back in the office in 2023, according to the Downtown Seattle Association. White-collar job growth is projected to continue this year with expansions in the financial activities and the information sectors. These typically high-wage jobs will attract more relocations to the Puget Sound, as net migration is forecast to reach approximately 26,000 additional residents in 2024. As a result, household formation is projected to accelerate to create significant housing demand this year. This will boost the apartment market, as lease renewals and net absorption are expected to push up apartment occupancy 20 basis points annually to an average of 94.8% in the fourth quarter of 2024. The rise in occupancy, as nearly 21,700 units are scheduled to come online over the next four quarters, will bolster apartment operators’ confidence in the market. After advancing 1.4% in 2023, monthly effective rent is projected to rise 2.9% annually to an average of $2,204 in the fourth quarter of 2024. The forecast increase in the median household income should offset the burden for renters, as the rent share of wallet is expected to remain at 22.8% year over year.
Strong Household Formation Expected to Bolster Apartment Sector
SEATTLE-TACOMA
$2,204
94.8%
DOWN 7.2% YOY
$284,986
$78,193
2,934,000
South Florida was a popular relocation destination coming out of the pandemic, with 130,000 more people moving into the metro than moving out from 2020 through 2023. This trend is expected to continue, with net migration forecast to reach 52,500 additional residents this year, contributing to significant housing demand. Part of the appeal of the Tri-County metro is projected broad-based hiring as payrolls grow 0.9%, or by 27,500 jobs, over the next 12 months. A portion of the new hires will serve the healthcare needs of the influx of retirees to the metro. A share of the additions will come with the opening of the University of Miami Health System’s six-story, 150,000-square-foot outpatient ambulatory center in Doral in the second half of this year. These employees are a part of the South Florida population facing a competitive homeownership market, with higher costs to borrow and a median home price for South Florida projected to hover around $600,000 in 2024. This will drive households of all incomes to rent, reflected in the 24,900 net units that are forecast to be absorbed over the next four quarters. Facilitating leasing activity, especially among Class A stock, will be approximately 26,000 units on pace to be delivered by year-end. This will be most notable in the urban centers of the Tri-County metro. A combined 6,300 units are scheduled to come online in the Downtown Miami/South Beach and the Fort Lauderdale submarkets. Each area is also projected to have some of the strongest leasing velocity in South Florida in 2024.
Apartment Development Filling Housing Demand in South Florida
SOUTH FLORIDA
39.4%
$2,569
DOWN 10.1% YOY
$241,517
$133,740
3,403,600
Projected population growth, wage increases, and rising apartment occupancy rates serve as encouraging indicators for apartment operators in 2024 amid a surge of new inventory. Building activity across the metro is well above its 10-year average, with 19,794 units scheduled to come online in 2024. Despite the elevated numbers, market occupancy is projected to recoup 40 basis points to reach 95.2% in the fourth quarter of 2024. The occupancy rise over the next year comes as a result of a 0.7% population expansion, an employment increase of 18,000 net jobs, and wage growth of 3.0%. A recent study from The Philadelphia Inquirer indicates that Washington, D.C., remained one of the top destinations for Generation Z and Millennial residents to migrate to, which further explains the positive outlook for 2024. The Navy Yard/Capitol South submarket will receive the largest increase of new supply in the region, with 2,256 market-rate units expected to deliver in 2024. A significant share of the market absorption will be in the submarket over the next year, with projected net move-ins at 2,122 units. Rents in the submarket will command a pricing premium of 27% by year-end 2024 when compared to the market average due to the desirability of living within the district's core and the many benefits that it offers to residents. The submarket gives residents access to various nearby entertainment activities, including Nationals Park, L’Enfant Plaza, and Audi Field, as well as proximity to the U.S. Capitol via the Metrorail.
Rapid Rate of Apartment Absorption Expected to Outpace D.C. Development Surge
WASHINGTON, D.C.
$2,147
95.2%
