Five Apartment Markets Likely to Overheat

And why can’t Dallas and Houston kick their concessions habit in this strong market.

Phoenix, Raleigh-Durham, Las Vegas, Tampa and Denver are to be considered the most likely apartment markets to overheat in the coming months, according to Kimberly Byrum, Principal-Multifamily, Zonda Advisory, who presented Tuesday at the MFE Conference hosted by Zonda in Las Vegas.

She said that high occupancy is driving unprecedented rent growth in asking rents, primarily on new lease activity. “Will it hold?” Byrum said. “Let’s see how many leases are being signed at these rates?”

Other than growth in the single-family housing market in Phoenix, builders are not increasing production of new homes at a fast pace, Byrum said, which could further impact apartment demand and put more pressure on rents, especially in Raleigh-Durham, Las Vegas and Tampa.

As apartment construction tries to resume in most of the country, Byrum said that the length of Phoenix’s pandemic lock down was on the shorter side, therefore, “that market had a head start when it came to returning to construction normalcy.”

She also shared some random questions that her clients said “are keeping them up at night.”