Demand for apartments in the commercial space is forecast to remain strong into 2022, according to the latest data from the National Association of REALTORS® (NAR).
So far this quarter, demand for multifamily has been robust, with a net increase of 1.06 million apartments occupied since the second quarter of 2020. Vacancy rates within this market have fallen to 4.6% and the median asking price has increased 11.4% YoY.
For units absorbed, Texas takes the lead with two markets—Dallas (47,182) and Houston (37,117)—reporting about a 6% absorption rate of stock apartment units. Other top markets include New York (34,619), Los Angeles (30,879), Washington, D.C. (22,436), Atlanta (22,272), Chicago (20,810), Austin (20,443), Seattle (18,481) and Phoenix (16,054).
Rents are increasing across the board, with 127 of 390 metro areas seeing double-digit growth. The highest rent growth is occurring in Florida metros, where rents have increased over 20% in Palm Beach, Orlando, Tampa, Jacksonville, Sarasota, Port St. Lucie, Fort Myers, Naples, and Punta Gorda.
Into 2022, NAR expects rents to continue growing at a strong pace, pushed up by higher mortgage rates and increased demand. However, an injection of 650,000 units that are currently under construction could help balance out inventory, and thus soften affordability.
It all depends on market-level outlooks, however, as some metros areas can expect added stock while others will continue to suffer from low inventory. These markets are more likely to see rent growth easing over the next two years due to significant under-construction stock: Nashville, Tennessee (14%); Huntsville, Alabama (16%); Santa Fe, Mexico (28%); The Villages, Florida (32%); Punta Gorda, Florida (21%); and New Bern, North Carolina (14%).
For more information, please visit www.nar.realtor.
